ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT …
Transcript of ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT …
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
LANCASTER, CALIFORNIA
AUDIT REPORT
FOR THE YEAR ENDED
JUNE 30, 2018
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
TABLE OF CONTENTS
JUNE 30, 2018
1
4
15
16
17
19
20
21
51
52
53
54
55
56
57
58
59
60
61
62
Reconciliation of Governmental Funds to the Statement of Net Position 63
Note to Supplementary Information 64
Independent Auditors' Report
Management's Discussion and Analysis
Basic Financial Statements:
Statement of Net Position
Statement of Revenues, Expenses and Changes in Net Position
Statement of Cash Flows
Statement of Fiduciary Net Position
Statement of Changes in Fiduciary Net Position
Notes to Financial Statements
Note to Required Supplementary Information
District Organizational Structure
Schedule of Workload Measures for State General Apportionment -
Schedule of Changes in the Net OPEB Liability and Related Ratios
Schedule of Contributions - OPEB
Schedule of Proportionate Share of the Net Pension Liability
Schedule of Expenditure of Federal Awards
Schedule of Contributions - Pensions
Schedule of State Financial Awards
Reconciliation of Annual Financial and Budget Report (CCFS-311) with
Audited Financial Statements
FINANCIAL SECTION
REQUIRED SUPPLEMENTARY INFORMATION
Annual/Actual Attendance
SUPPLEMENTARY INFORMATION
Reconciliation of ECS 84362 (50 Percent Law) Calculation
Details of the Education Protection Account
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
TABLE OF CONTENTS
JUNE 30, 2018
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Required by the Uniform Guidance 68
70
72
75
Independent Auditors' Report on Internal Control over Financial
Reporting and on Compliance and Other Matters Based on an
Audit of Financial Statements Performed in Accordance
with Government Auditing Standards
Summary Schedule of Prior Year Audit Findings
OTHER INDEPENDENT AUDITORS' REPORTS
Independent Auditors' Report on Compliance For Each Major
Federal Program; and Report on Internal Control over Compliance
Independent Auditors' Report on State Compliance
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
Schedule of Audit Findings and Questioned Costs
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INDEPENDENT AUDITORS’ REPORT
The Board of Trustees
Antelope Valley Community College District
Lancaster, California
Report on the Financial Statements
We have audited the accompanying financial statements of the business-type activities and the fiduciary activities
of Antelope Valley Community College District, as of and for the year ended June 30, 2018, and the related notes to
the financial statements, which collectively comprise Antelope Valley Community College District’s basic financial
statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance
with accounting principles generally accepted in the United States of America; this includes the design,
implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial
statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit
in accordance with auditing standards generally accepted in the United States of America and the standards
applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,
the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such
opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness
of significant accounting estimates made by management, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinions.
2
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the business-type activities and the fiduciary activities of Antelope Valley Community College
District, as of June 30, 2018, and the respective changes in its financial position and, where applicable, cash flows
thereof for the year then ended in accordance with accounting principles generally accepted in the United States of
America.
Emphasis of Matter
As discussed in Note 2 to the financial statements, the District implemented the Governmental Accounting
Standards Board (GASB) issued GASB Statement No. 75, "Accounting for Financial Reporting for Postemployment
Benefits Other than Pensions". This Statement replaces the requirements of GASB Statements No. 45, "Accounting
and Reporting for Employers Post-Employment Benefits Other than Pensions", as amended, and GASB Statement
No. 57, "OPEB Measurements by Agent Employers and Agent Multiple-Employer Plans." Note disclosures and
required supplementary information requirements about OPEB are also discussed. Our opinion is not modified with
respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s Discussion
and Analysis and the Required Supplementary Information section, as listed in the Table of Contents, be presented
to supplement the basic financial statements. Such information, although not a part of the basic financial statements,
is required by Governmental Accounting Standards Board who considers it to be an essential part of financial
reporting for placing the basic financial statements in an appropriate operational, economic, or historical context.
We have applied certain limited procedures to the required supplementary information in accordance with auditing
standards generally accepted in the United States of America, which consisted of inquiries of management about
the methods of preparing the information and comparing the information for consistency with management’s
responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the
basic financial statements. We do not express an opinion or provide any assurance on the information because the
limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise
Antelope Valley Community College District’s basic financial statements. The accompanying schedule of expenditure
of federal awards as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Award and other supplementary information
listed in the table of contents are presented for purposes of additional analysis and are not a required part of the
basic financial statements.
3
The schedule of expenditure of federal awards and other supplementary information as listed in the table of contents
is the responsibility of management and was derived from and relates directly to the underlying accounting and
other records used to prepare the basic financial statements. The schedule of expenditure of federal awards and
other supplementary information as listed in the table of contents, except for the Organizational Structure, have
been subjected to the auditing procedures applied in the audit of the basic financial statements and certain
additional procedures, including comparing and reconciling such information directly to the underlying accounting
and other records used to prepare the basic financial statements or to the basic financial statements themselves,
and other additional procedures in accordance with auditing standards generally accepted in the United States of
America. In our opinion, the schedule of expenditure of federal awards and other supplementary information as
listed in the table of contents, except for the Organizational Structure, are fairly stated, in all material respects, in
relation to the basic financial statements as a whole.
The Organizational Structure has not been subjected to the auditing procedures applied in the audit of the basic
financial statements, and accordingly, we do not express an opinion or provide any assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 11, 2018 on
our consideration of Antelope Valley Community College District’s internal control over financial reporting and on
our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other
matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting
and compliance and the results of that testing, and not to provide an opinion on internal control over financial
reporting or on compliance. That report is an integral part of an audit performed in accordance with Government
Auditing Standards in considering Antelope Valley Community College District’s internal control over financial
reporting and compliance.
San Diego, California
December 19, 2018
MANAGEMENT’S DISCUSSION
AND ANALYSIS
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2018
4
This section of Antelope Valley College District’s annual financial report presents our discussion and analysis of the
District’s financial performance during the year ended June 30, 2018.
The California Community College Chancellor’s Office has recommended that all State community college Districts
follow the new standards under the Business Type Activity (BTA) model. The District has adopted the BTA reporting
model for these financial statements to comply with the recommendation of the Chancellor’s Office and to report
in a manner consistent and comparable with other community college Districts.
The following discussion and analysis provides an overview of the District’s financial activities with emphasis on
current year data. As required by accounting principles, the annual report consists of three basic financial statements
that provide information on the District as a whole: the Statement of Net Position; the Statement of Revenues,
Expenses and Changes in Net Position; and the Statement of Cash Flows.
Some of the changes in the financial statements that have resulted under the BTA model from the implementation
of these standards are:
• Revenues and expenses are categorized as either operating or non-operating
• Pledges from donors (excluding permanent endowments) are recorded, as receivable and non-operating
revenues at the date of the pledge
• Capital assets are included in the statement presentations
FINANCIAL HIGHLIGHTS
• The District’s total combined net position, was $70,497,247 at June 30, 2018. This is a change from the total combined net position as of June 30, 2017, which reflected $62,326,166.
• During the fiscal year, the District’s total operating expenses, was $133,548,309. Combined operating, non-
operating and capital revenues totaled $150,782,082. This produced an excess of revenues over expenses of $3,927,289.
• The general fund reported a fund balance this year of $12,840,044, which represents an overall 14 percent of total ending balance. The restricted reserve percentage is 17 percent and the unrestricted reserve percentage is 13 percent. Although the Chancellor’s Office recommends that the District maintain, at minimum, an unrestricted reserve percentage of approximately 5 percent, recent challenges with California State apportionment have indicated that greater reserve percentages are necessary to ensure that there is adequate cash on hand to pay obligations and to manage the risk associated with funding shortfalls from property taxes or enrollment fees that do not have automatic backfills. The Government Finance Officer’s Organization (GFOA) released a recommended best practice on unrestricted reserve levels. http://www.gfoa.org/appropriate-level-unrestricted-fund-balance-general-fund. In summary, GFOA recommends no less than two months of reserves to assist in volatility, risk and cash flow. It is not a one-
size fits all and several factors need to be assessed to see if a particular District needs to determine a higher level based on several factors; however, the minimum recommendation is 16.7 percent.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2018
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Statement of Net Position
The Statement of Net Position (see page 15, Basic Financial Statements section) presents the assets, deferred
outflows of resources, liabilities, deferred inflows and outflows of resources and net position of the District as of the
end of the fiscal year using the accrual basis of accounting, which is comparable to the accounting basis used by
most private-sector institutions. Net position–the difference between assets plus deferred outflows of resources
less liabilities and deferred inflows of resources–are one way to measure the financial health of the District. The
data allows readers to determine the assets available to continue the operations of the District. The net position of
the District consists of three major categories.
• Net investment in capital assets – The District’s equity in property, plant and equipment.
• Restricted net position (divided by either expendable or nonexpendable.) – Restricted net position is
restricted by use constraints placed on them by outside parties such as through agreements, laws, or
regulations of creditors or other governments or imposed by law through constitutional provisions or
enabling legislation.
• Unrestricted net position – The District can use them for any lawful purpose. Although, unrestricted, the
District’s governing board may place internal restrictions on net position, but it retains the power to change,
remove, or modify these restrictions.
The District’s financial position, as a whole, remained positive in fiscal year 2018. During the fiscal year ending June
30, 2018, the total net position changed, to include liabilities and deferred inflows related to OPEB. Accounts
receivable has decreased by $581,977 or approximately 17 percent. Current liabilities increased by $3,279,011 or
by 11 percent mainly due to the current portion of long-term debt, unearned revenues, and vendor warrants
outstanding as June 30, 2018. The final paycheck for the fiscal year is booked in the current fiscal year and paid out
of the following fiscal year. Unearned revenue mainly occurs with restricted programs and grants or from Summer
session. The revenues cannot be “earned” until they are expended.
2018 2017 Change
ASSETS AND DEFERRED OUTFLOWS OF RESOURCES
Total assets 461,945,721$ 480,373,454$ (18,427,733)$
Deferred outflow of resources 33,956,264 26,898,771 7,057,493
Total Assets and Deferred Outflows of Resources 495,901,985 507,272,225 (11,370,240)
LIABILITIES AND DEFERRED INFLOWS OF RESOURCES
Current liabilities 34,335,306 31,056,295 3,279,011
Non-current liabilities 384,478,931 410,116,328 (25,637,397)
Deferred inflows of resources 6,590,501 3,773,436 2,817,065
Total Liabilities and Deferred Inflows of Resources 425,404,738 444,946,059 (19,541,321)
NET POSITION
Invested in capital assets, net of related debt 111,056,888 97,867,507 13,189,381
Restricted 17,552,781 16,695,002 857,779
Unrestricted (58,112,422) (52,236,343) (5,876,079)
Total Net Position 70,497,247$ 62,326,166$ 8,171,081$
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2018
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Statement of Revenues, Expenses and Changes in Net Position
The Statement of Revenues, Expenses and Changes in Net Position (see page 16, Basic Financial Statements section)
presents the operating results of the District. The purpose of the statement is to present the revenues received by
the District, both operating and non-operating, and the expenses paid by the District, operating and non-operating,
and any other revenues, expenses, gains and losses received or spend by the District. State general apportionment
funds, which budgeted for operations, are considered non-operating revenues according to generally accepted
accounting principles.
Changes in total net position on the Statement of Net Position are based on the activity presented in the Statement
of Revenues, Expenses, and Changes in Net Position. Generally speaking, operating revenues are received for those
expenses paid to acquire or produce the goods and services provided in return for the operating revenues, and to
carry out the mission of the District.
The Statement of Revenues, Expenses, and Changes in Net Position reflects a positive year due to an increase in
other revenue and state apportionments. The change in net position at June 30, 2018 has increased at the end of
the year by $1,971,460 from change at June 30, 2017. Below is a summary of changes in revenues and expenses for
the years ending June 30, 2018 and June 30, 2017:
2018 2017 Change
REVENUES
Tuition and fees (net) 3,972,209$ 4,199,714$ (227,505)$
Grants and contracts, noncapital 32,846,717 33,835,261 (988,544)
Financial aid revenues (Pell) 25,294,558 23,950,641 1,343,917
General revenues - property taxes 22,388,972 23,976,798 (1,587,826)
General revenues - state aid 58,804,643 54,860,997 3,943,646
General revenues - other 7,474,983 8,617,941 (1,142,958)
Total Revenues 150,782,082 149,441,352 1,340,730
EXPENSES
Operating expenses 133,548,309 142,198,192 (8,649,883)
Interest 13,306,484 5,287,331 8,019,153
Total Expenses 146,854,793 147,485,523 (630,730)
Change in Net Position 3,927,289$ 1,955,829$ 1,971,460$
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2018
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Total Revenue for the Year Ended June 30, 2018
The following chart graphically shows the various components of revenue for the District as a whole:
Tuition and fees
(net) 2%
Grants and
contracts, noncapital
22%
Financial aid
revenues (Pell) 17%
General revenues -
property taxes 15%
General revenues -
state aid 39%
General revenues -
other 5%
Total Revenues - June 30, 2018
Total Operating Expenses for the Year Ended June 30, 2018
The following chart graphically shows the various components of operating expenses for the District as a whole:
Salaries
37%
Benefits
17%
Supplies, materials,
& other operating expenses
3%
Depreciation
8%
Financial aid
disbursements26%
Interest expense
9%
Total Operating Expenses - June 30, 2018
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2018
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Statement of Cash Flows
The statement of cash flows (see page 17 and 18, Basic Financial Statements section) provides additional information
about the District’s financial results by reporting its major sources and uses of cash. This information assists readers
in assessing the District’s ability to generate revenue, meet its obligations as they come due, and evaluate its need
for external financing. The statement is divided into several parts. The first part deals with operating cash flows
and show the net cash used by the operating activities of the institution. The second section reflects cash flows
from non-capital financing activities and shows the sources and uses of those funds. The third section deals with
cash flows from capital and related financing activities. This section deals with the cash used for the acquisition and
construction of capital and related items. The fourth section deals with cash flows from investing activities. This
section reflects the cash received and spent for short-term investments and any interest paid or received on those
investments. The net cash used by the District for operating activities for period ending June 30, 2018 was
$91,318,708.
Capital Assets
The District’s capital assets, net of accumulated depreciation at June 30, 2018 totaled $291,117,638. This represented
an increase in capital assets of $7,825,401 from the prior year or a 2.7 percent increase from 2017 due to changes
in construction in progress and building improvements. The District has continued its capital improvements, utilized
redevelopment funding and has received State scheduled maintenance funds. Below is a summary of the District’s
capital assets.
2018 2017 Change
Capital Assets not being depreciated 49,887,785$ 148,036,479$ (98,148,694)$
Capital Assets being depreciated 287,250,664 169,462,542 117,788,122
Accumulated depreciation (46,020,811) (34,206,784) (11,814,027)
Total Capital Assets 291,117,638$ 283,292,237$ 7,825,401$
Long-Term Liabilities
The District’s total liabilities at June 30, 2018 totaled $395,802,746 of which $384,478,931 are long term liabilities as
listed below; $11,323,815 of this amount is due in the upcoming fiscal year. Long term liabilities have decreased by
$14,043,178 or 3.4 percent mainly due to the lease revenue bond repayment and an increase in net pension liability.
Below is a summary of the District’s long-term liabilities.
2018 2017 Change
General obligation and revenue bonds 309,583,455$ 325,470,987$ (15,887,532)$
Compensated absences 1,848,406 1,748,577 99,829
Net OPEB liability 6,139,627 5,205,930 933,697
Net pension liability 72,726,520 63,960,830 8,765,690
Other long-term liabilities 5,504,738 13,459,600 (7,954,862)
Total Long-term Liabilities 395,802,746$ 409,845,924$ (14,043,178)$
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2018
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District’s Fiduciary Responsibility
The District is the trustee, or fiduciary, for certain amounts held on behalf of the students, clubs and donors for
student loans and scholarships. The District’s fiduciary activities are reported in separate Statements of Fiduciary
Net Position and Changes in Fiduciary Net Position. These activities are excluded from the District’s other financial
statements because we cannot use these assets to finance operations. The District is responsible for ensuring that
the assets reported in these funds are used for their intended purposes.
UNRESTRICTED GENERAL FUND BUDGETARY HIGHLIGHTS
Over the course of the year, the District revises its budget to provide for unanticipated changes in revenues and
expenditures. The Board of Trustees adopted the fiscal year 2018-2019 budget on September 10, 2018.
ECONOMIC FACTORS AFFECTING THE FUTURE OF THE ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
The State of California approved its 2018-2019 budget on June 27, 2018. The budget continues to increase the
state’s Rainy Day Fund and pay down liabilities. Below is the California Community College budget1 and changes
through the legislative process.
Ongoing Funding
Item Amount
Student-Centered Funding Formula $269 M
K-12 Component of Strong Workforce Program $164 M
Increase in Full-Time Faculty $50 M
California College Promise Program $46 M
Student Success Completion Grant Program $40.6 M
California Online Community College $20 M
Adult Education Data Systems $5 M
Financial Aid Technology Systems $5 M
NextUp Program $5 M
Course Identification Numbering System (C-ID) $0.69 M
Academic Senate $0.23 M
One-Time Funding
Item Amount
California Online Community College $100 M
Online Education Initiative $35 M
Part-Time Faculty Office Hours $50 M
Deferred Maintenance and Instructional Support $28.5 M
Financial Aid Technology Systems $13.5 M
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2018
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ECONOMIC FACTORS AFFECTING THE FUTURE OF THE ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT,
continued
Legal Services for Undocumented Persons $10 M
Mental Health Services and Training $10 M
Pathways in STEM Fields $10 M
Hunger Free Campuses $10 M
El Camino College Public Safety Training Center $10 M
Veterans Resource Centers $8.5 M
Economic and Workforce Development Projects $8 M
Open Educational Resources $6 M
Reentry Grant Program $5 M
Career Readiness Training Program for Refugees $5 M
Norco College Early Childhood Education Center $5 M
Certified Nurse Assistant Training Programs $2 M
Backfill for Fire-Related Property Tax Declines $1.9 M
Los Angeles Valley College Family Resource Center $0.8 M
K-12 CTE Pathways Program $0.68 M
State Initiatives
The notable highlights of the 2018-2019 adopted budget for community colleges is the change in funding formula
for the system resulting in an additional $269 million and the online college implementation with $100 million in
one-time funding and $20 million in ongoing funding. The increase in base allocation funding is needed to fund
STRS & PERS employer pension obligation increases. There is also a significant investment being made in the K-12
integration of strong workforce for an ongoing increase of $164 million.
The new funding formula is as follows with a 3-year implementation:
Year 1 (2018-2019)
70% Base (Enrollment) 3-year average FTES 20% Supplemental Grant using headcount of Pell recipients, College
Promise Grant recipients and AB540 Students 10% Student Success Initiative Grant based on outcomes of
progression and living wage. An additional separate allocation for those outcomes that are Pell recipients or College
Promise Grant recipients.
Year 2 (2019-2020)
65% Base (Enrollment) 3-year average FTES 20% Supplemental Grant using headcount of Pell recipients, College
Promise Grant recipients and AB540 Students15% Student Success Initiative Grant based on outcomes of
progression and living wage. An additional separate allocation for those outcomes that are Pell recipients or College
Promise Grant recipients.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2018
11
ECONOMIC FACTORS AFFECTING THE FUTURE OF THE ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT,
continued
Year 3 (2020-2021)
60% Base (Enrollment) 3-year average FTES 20% Supplemental Grant using headcount of Pell recipients, College
Promise Grant recipients and AB540 Students 20% Student Success Initiative Grant based on outcomes of
progression and living wage. An additional separate allocation for those outcomes that are Pell recipients or College
Promise Grant recipients.
Local initiatives
The District also put Measure AV on the November 2016 ballot, which was passed by the local voters. Measure AV
is for $350 million and will be used to upgrade math, engineering, aerospace/advanced manufacturing
classrooms/labs, improve class availability and safety, update technology, repair, construct, acquire facilities,
sites/equipment to maintain quality, affordable education for local students/returning veterans, and prepare
students for jobs and transfer to four-year universities. $35 million of this measure will be endowed without
touching the principle and the interest will be utilized each year to maintain, renovate and invest in capital projects.
This will reduce the reliance on volatile State scheduled maintenance funds that sometimes are not provided in
times of recession. During this last recession, for 5 years, the District received zero scheduled maintenance dollars
from the State, adding pressure to the operating fund which is used to pay for classroom instructors, utilities and
support staff.
Proposition 51, Public School Facilities Bond, was also passed in November 2016 by the voters. This will bring in $9
billion to the California’s K-12 and community colleges; $2 billion specifically for community colleges. The District
plans to leverage as much local Measure AV funds as possible by applying for some of these State bond funds with
eligible projects.
District Budget
The District receives approximately *97%* of its unrestricted general funding from State apportionment directly
linked to student attendance or FTES. In 2014-2015, the actual FTES was 11,246. Growth funding was available, and
a strategic funding decision was made to capture the available growth funding. This was the first available funding
for growth that was been made in 8 years due to the recession. The District started to decline the following year
and in 2016-2017, FTES was at 10,839. The District had to rebench FTES to a lower level, which led to stability.
Several community colleges are in the same situation. At the September 2017 Enrollment Management Committee
meeting, a stability plan was presented. The second apportionment attendance report was completed in April 2018
and indicates that FTES is flat.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2018
12
ECONOMIC FACTORS AFFECTING THE FUTURE OF THE ANTELOPE VALLEY COMMUNITY COLLEGE
DISTRICT, continued
2017-2018 FTES (Year 2 of Stability) Actuals
FTES Target
2017-2018 FTES Base 10,567
2016-2017 FTES Needed to make up from reassigning Summer 2017 400
Total FTES Actuals minus Summer 2016 reassigned FTES 10,967
2% Enrollment growth target above base 219
2017-2018 Target Base 11,186
Multi-Year Budget Assumptions
See above funding formula change for multi-year budget assumptions. On June 28, 2012, the Supreme Court
upheld the Patient Protection and Affordable Car Act (ACA) as constitutional. Although it was signed into law in
2010, the majority of the provisions went into effect in January 2015 and the remaining will be phased in by 2018.
Most notably, the impact for employers not following the provisions could result in IRS penalties of $2,000 - $3,000
per impacted employee, depending upon the situation. The District has developed a contingency fund to address
the financial liabilities associated with potential ACA penalties.
Minimum wage has increasing in California to $10.00 per hour beginning July 1, 2016. California Passed the Fair
Wage Act of 2016, which phases in minimum wage by increasing it $1 each year until $15.00 per hour is reached.
This has been included in the District’s multi-year budget projections.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2018
13
ECONOMIC FACTORS AFFECTING THE FUTURE OF THE ANTELOPE VALLEY COMMUNITY COLLEGE
DISTRICT, continued
The CA State Legislature adopted a plan to address the unfunded liability for the California State Teachers
Retirement System (CalSTRS) and California Public Employees Retirement System (CalPERS) over the next 30 years.
CalSTRS & CalPERS
The CA State Legislature developed a plan to address the unfunded liability for the California State Teachers
Retirement System and California Public Employees Retirement System over the next 30 years. The increase in
employer obligation is below:
STRS Contribution Rates
Employer Employee (pre-
2013 hire date)
Employee (post-
2013 hire date)
2013-2014 8.25% 8% 8%
2014-2015 8.88 8.15 8.15
2015-2016 10.73 9.2 8.56
2016-2017 12.58 10.25 9.205
2017-2018 14.43 10.25 9.205
2018-2019 16.28 10.25 10.205
2019-2020 18.13 10.25 10.205
2020-2021 19.1 10.25 10.205
PERS Contribution Rates
Employer Employee (pre-
2013 hire date)
Employee (post-
2013 hire date)
2013-2014 11.44% 7% 6%
2014-2015 11.77 7.00 6.00
2015-2016 11.85 7.00 6.00
2016-2017 13.89 7.00 6.00
2017-2018 15.53 7.00 6.50
2018-2019 18.1 7.00 6.50
2019-2020 20.8 7.00 6.50
2020-2021 23.8 7.00 6.50
Minimum Wage
The Fair Wage Act of 2016 was passed that will increase the minimum wage $1 per year over the next four years
starting at $10.50 effective January 1, 2017 to $15 per hour on January 1, 2022.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2018
14
ECONOMIC FACTORS AFFECTING THE FUTURE OF THE ANTELOPE VALLEY COMMUNITY COLLEGE
DISTRICT, continued
The proposed plan would share the responsibility of the unfunded liability by the state, employers, and the
employees themselves. Antelope Valley College has included this information in the multi-year budget projections.
Governmental Accounting Standards Board (GASB) 67/68 revised the accounting requirements for pension liability
obligations. The new requirements now mandate that the liability be booked at the District’s balance sheet showing
the net pension liability (NPL). Pension expenses shall also be recognized on the income statement. The goal is to
create transparency at the local level showing the pension liability. The District will be addressing this through the
newly created retirement board of authority (RBA) in order to ensure compliance with the GASB standard.
GASB 74 became effective July 1, 2016 & GASB 75 went into effect July 1, 2017. This replaces the Other Post
Employment Benefit (OPEB) GASB 43 & 45. It changed the way that the OPEB liability is calculated by considering
COLA changes, taxes, Cadillac plan taxes and other penalties. It also requires amortization to be not more than 30
years. The major change is that even though an actuarial study is required every two years, the report must contain
the in-between years in the report, which will mean additional scenarios and cost for the study itself.
Contacting the Antelope Valley College’s Financial Management
This financial report is designed to provide our citizens and taxpayers an overview of the District’s finances and to
demonstrate the District’s accountability for the money it receives. If you have any questions about this report or
need additional financial information, contact the District’s Business Services Area.
FINANCIAL SECTION
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF NET POSITION
JUNE 30, 2018
See accompanying notes to the financial statement 15
ASSETS
Current Assets:
Cash and cash equivalents 26,751,616$
Accounts receivable, net 2,916,977
Inventory 686,760
Prepaid expenditures and other assets 1,102,486
Total Current Assets 31,457,839
Noncurrent Assets:
Restricted cash and cash equivalents 139,370,244
Capital assets, net 291,117,638
Total Noncurrent Assets 430,487,882
TOTAL ASSETS 461,945,721
DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on refunding 13,022,008
Deferred outflows - OPEB 387,113
Deferred outflows - pensions 20,547,143
TOTAL ASSETS & DEFERRED OUTFLOWS OF RESOURCES 495,901,985$
LIABILITIES
Current Liabilities:
Accounts payable & accrued expenses 15,305,184$
Unearned revenue 7,706,307
Long-term debt, current portion 11,323,815
Total Current Liabilities 34,335,306
Noncurrent Liabilities:
Compensated absences 1,848,406
Net pension liability 72,726,520
Net OPEB Liability 6,139,627
Bank faculty load time 131,815
Long-term debt, non-current portion 303,632,563
Total Noncurrent Liabilities 384,478,931
TOTAL LIABILITIES 418,814,237
DEFERRED INFLOWS OF RESOURCES
Deferred inflows - pensions 6,590,501
NET POSITION
Net investment in capital assets 111,056,888
Restricted for:
Debt service 17,496,624
Capital projects (1,842,270)
Other special purpose 1,898,427
Unrestricted (58,112,422)
TOTAL NET POSITION 70,497,247
TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION 495,901,985$
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR THE YEAR ENDED JUNE 30, 2018
See accompanying notes to the financial statement 16
OPERATING REVENUES
Tuition and fees (gross) 14,097,163$
Less: Scholarship discounts and allowances (10,124,954)
Net tuition and fees 3,972,209
Grants and contracts, noncapital:
Federal 11,343,321
State 18,472,939
Local 6,900
Other operating activity 3,023,557
TOTAL OPERATING REVENUES 36,818,926
OPERATING EXPENSES
Salaries 55,226,160
Employee benefits 24,300,872
Supplies, materials, and other operating expenses and services 4,006,560
Student aid 38,200,690
Depreciation 11,814,027
TOTAL OPERATING EXPENSES 133,548,309
OPERATING INCOME (LOSS) (96,729,383)
NON-OPERATING REVENUES (EXPENSES)
State apportionments, noncapital 53,870,551
Local property taxes 7,373,656
State taxes and other revenues 4,934,092
Pell grants 25,294,558
Investment income - noncapital 393,798
Interest expense on capital asset-related debt (13,306,484)
Other non-operating revenues 7,081,185
TOTAL NON-OPERATING REVENUES (EXPENSES) 85,641,356
INCOME BEFORE OTHER REVENUES, EXPENSES, GAINS, OR LOSSES (11,088,027)
Local property taxes and revenues, capital 15,015,316
INCREASE IN NET POSITION 3,927,289
NET POSITION -- BEGINNING OF YEAR 62,326,166
PRIOR YEAR ADJUSTMENT (SEE NOTE 12) 4,243,792
NET POSITION -- END OF YEAR 70,497,247$
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2018
See accompanying notes to the financial statements 17
CASH FLOWS FROM OPERATING ACTIVITIES
Tuition and fees 3,972,209$
Grants and contracts 29,320,657
Payments to or on behalf of employees (79,226,323)
Payments to vendors for supplies and services (50,182,060)
Other operating cash flows 3,023,557
Net Cash Used by Operating Activities (93,091,960)
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
State apportionments 53,870,551
Property taxes 7,373,656
State taxes and other revenues 4,934,092
Financial aid revenues 25,294,558
Other nonoperating cash flows 11,324,977
Net Cash Provided by Non-capital Financing Activities 102,797,834
CASH FLOWS FROM CAPITAL FINANCING ACTIVITIES
Acquisition and construction of capital assets (19,639,428)
Local property taxes and other revenues, capital purpose 15,015,316
Principal paid on capital debt (25,519,576)
Interest paid on capital debt (6,041,969)
Net Cash Used by Capital Financing Activities (36,185,657)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment income 393,798
Net Cash Provided/(Used) by Investing Activities 393,798
NET DECREASE IN CASH & CASH EQUIVALENTS (26,085,985)
CASH & CASH EQUIVALENTS, BEGINNING OF YEAR 192,207,845
CASH & CASH EQUIVALENTS, END OF YEAR 166,121,860$
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2018
See accompanying notes to the financial statements 18
Primary
Institution
RECONCILIATION OF OPERATING LOSS TO NET CASH
USED BY OPERATING ACTIVITIES
Operating income (96,729,383)$
Adjustments to Reconcile Operating Loss to Net Cash Used by
Operating Activities:
Depreciation expense 11,814,027
Changes in Assets and Liabilities:
Receivables, net 581,977
Inventory (9,476)
Prepaid items (405,352)
Deferred outflows - OPEB (387,113)
Deferred outflows - Pensions (7,678,954)
Accounts payable and accrued liabilities (8,141,959)
Deferred revenue (502,503)
Compensated absences 99,829
Bank faculty load time (34,101)
Net pension liability 8,765,690
Net OPEB liability (3,281,707)
Deferred inflows of resources 2,817,065
Total Adjustments 3,637,423
Net Cash Flows From Operating Activities (93,091,960)$
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF FIDUCIARY NET POSITION
JUNE 30, 2018
See accompanying notes to the financial statements 19
Associated Student Scholarship OPEB District
Students Representation and Loan Irrevocable Auxiliary
Trust Fund Fee Trust Fund Agency Fund Trust Fund Trust Fund Total
ASSETS
Cash and equivalents 538,605$ 329,313$ 27,677$ 1,175,533$ 516,043$ 2,587,171$
Investments - - - 1,744,883 - 1,744,883
Accounts receivable - 8,606 (505) - - 8,101
Total Assets 538,605 337,919 27,172 2,920,416 516,043 4,340,155
LIABILITIES
Accounts Payable - 253 - 139,468 187 139,908
Deferred revenue - 15,732 - - - 15,732
Accrued Expenses - - - 1,033,909 - 1,033,909
Total Liabilities - 15,985 - 1,173,377 187 1,189,549
NET POSITION
Net position restricted for OPEB - - - 1,747,039 - 1,747,039
Held in trust for others 538,605 321,934 27,172 - 515,856 1,403,567
Total Net Position 538,605$ 321,934$ 27,172$ 1,747,039$ 515,856$ 3,150,606$
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FOR THE YEAR ENDED JUNE 30, 2018
See accompanying notes to the financial statements 20
Associated Student Scholarship OPEB District
Students Representation and Loan Irrevocable Auxiliary
Trust Fund Fee Trust Fund Agency Fund Trust Fund Trust Fund Total
OPERATING REVENUES:
Other local revenue 172,039$ 40,056$ 247,912$ 92,108$ 463,861$ 1,015,976$
Other financing sources - - - 387,114 - 387,114
Total Operating Revenues 172,039 40,056 247,912 479,222 463,861 1,015,976
OPERATING EXPENSES:
Supplies, materials, and other outgo 162,517 16,655 227,109 - 472,147 878,428
Total Operating Expenses 162,517 16,655 227,109 - 472,147 878,428
Net Change in Net Position 9,522 23,401 20,803 479,222 (8,286) 524,662
NET POSITION:
Beginning of Year 529,083 298,533 6,369 1,267,817 524,142 2,625,944
End of Year 538,605$ 321,934$ 27,172$ 1,747,039$ 515,856$ 3,150,606$
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2018
21
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reporting Entity
Antelope Valley Community College District (the "District") is a political subdivision of the State of California and
provides educational services to the local residents of the surrounding area. While the District is a political
subdivision of the State, it is not a component unit of the State in accordance with the provisions of Governmental
Accounting Standards Board (GASB) Codification Section (Cod. Sec.) 2100.101. The District is classified as a state
instrumentality under Internal Revenue Code Section 115.
The decision to include potential component units in the reporting entity was made by applying the criteria set forth
in accounting principles generally accepted in the United States of America and GASB Cod. Sec. 2100. The three
criteria for requiring a legally separate, tax-exempt organization to be presented as a component unit are the "direct
benefit" criterion, the "entitlement/ability to access" criterion, and the "significance" criterion. The District has no
component units.
Basis of Accounting
For financial reporting purposes, the District is considered a special-purpose government engaged only in business-
type activities. Under this model, the District's financial statements provide a comprehensive entity-wide perspective
look at the District’s financial position and activities. Accordingly, the District's financial statements have been
presented using the economic resources measurement focus and the accrual basis of accounting. Under the accrual
basis, revenues are recognized when earned, and expenditures are recorded when the obligation has been incurred.
All significant intra-agency transactions have been eliminated. The budgetary and financial accounts of the District
are recorded and maintained in accordance with the Chancellor's Office's Budget and Accounting Manual.
Fiduciary funds for which the District acts only as an agent are not included in the business-type activities of the
District. These funds are reported in the Statement of Fiduciary Net Position and the Statement of Change in
Fiduciary Net Position at the fund financial statement level. The agency fund has no measurement focus but utilizes
the accrual basis of accounting for reporting its assets and liabilities.
Cash and Cash Equivalents
For the purposes of the financial statements, cash equivalents are defined as financial instruments with an original
maturity of three months or less. Funds invested in the Los Angeles County Treasury are considered cash equivalents.
Restricted Cash
Cash that is externally restricted to make debt service payments, maintain sinking or reserve funds, or to purchase
or construct capital or other noncurrent assets, is classified as noncurrent assets in the Statement of Net Position.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2018
22
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Investments
Investments held by the OPEB Irrevocable Trust Fund are reported at fair value using quoted market prices and
unrealized and realized gains and losses are included in the Statement of Change in Fiduciary Net Position.
Receivables
Receivables consist of tuition and fee charges to students and auxiliary enterprise services provided to students,
faculty and staff. Receivables also include amounts due from the federal government, state and local governments,
or private sources, in connection with reimbursement of allowable expenditures made pursuant to the District's
grants and contracts. The District maintains an allowance for doubtful accounts at an amount which management
considers sufficient to fully reserve and provide for the possible uncollectibility of other receivable balances. At June
30, 2018, management determined that no allowance was necessary.
Capital Assets
Capital assets are recorded at cost at the date of acquisition, or acquisition value at the date of donation in the case
of gifts. For equipment, the District's capitalization policy included all items with a unit cost of $5,000 or higher and
estimated useful life of greater than one year. Renovations to buildings, infrastructure, and land improvements that
significantly increase the value or extend the useful life of the structure are capitalized. Routine repairs and
maintenance are charged to operating expense in the year in which the expense was incurred.
Depreciation is computed using the straight-line method over the estimated useful lives of the assets ranging from
5 - 50 years depending on asset type.
The District capitalizes interest paid on obligations related to the acquisition, construction or rehabilitation of District
capital assets. Interest cost and interest capitalized totaled $13,306,484and $610,245, respectively, during the year
ended June 30, 2018.
Compensated Absences
Compensated absence costs are accrued when earned by employees. Accumulated unpaid employee vacation
benefits are recognized at year end as liabilities of the District.
Sick leave benefits are not recognized as liabilities of the District. The District's policy is to record sick leave as an
operating expenditure or expense in the period taken since such benefits do not vest nor is payment probable;
however, unused sick leave is added to the creditable service period for calculation of retirement benefits for certain
STRS and PERS employees, when the employee retires.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2018
23
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Banked Faculty Load
A regular teaching load is considered by a schedule which yields one Full Time Equivalent (FTE). An overload is
defined as a schedule which yields more than one FTE. The excess load is recorded as a liability in the Statement of
Net Position.
Unearned Revenue
Revenue from Federal, State and local special projects and programs is recognized when qualified expenditures
have been incurred. Tuition, fees and other support received but not earned are recorded as unearned revenue until
earned.
Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position includes a separate section for deferred outflows of resources.
This separate financial statement element, deferred outflows of resources, represents a consumption of net position
that applies to a future period(s), and as such will not be recognized as an outflow of resources
(expense/expenditures) until then. The District has recognized a deferred loss on refunding reported which reported
in the statement of net position. A deferred loss on refunding results from the difference in the carrying value of
refunded debt and its reacquisition price. This amount is deferred and amortized over the shortened life of the
refunded or refunding debt. During the year ended June 30, 2018, the District recognized $1,008,574 in amortization
of the deferred loss on refunding’s. Additionally, the District has recognized a deferred outflow of resources related
to the payments made subsequent to the measurement date for the pensions.
In addition to liabilities, the statement of net position reports a separate section for deferred inflows of resources.
This separate financial statement element, deferred inflows of resources, represents an acquisition of net position
that applies to a future period(s) and as such, will not be recognized as an inflow of resources (revenue) until that
time. The District has recognized a deferred inflow of resources related to the recognition of the pension liability
reported which is in the statement of net position.
Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources
related to pensions, and pension expense, information about the fiduciary net position of the State Teachers’
Retirement Plan (STRP) and Public Employers Retirement Fund B (PERF B) and additions to/deductions from STRP’s
and PERF B’s fiduciary net position have been determined on the same basis as they are reported by STRP and PERF
B. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and
payable in accordance with the benefit terms. Investments are reported at fair value.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2018
24
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Net Position
The District's net position are classified as follows:
Net investment in capital assets: This represents the District's total investment in capital assets, net of associated
outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet
expended for capital assets, such amounts are not included as a component of net investment in capital assets.
Restricted net position: Restricted expendable net position includes resources in which the District is legally or
contractually obligated to spend resources in accordance with restrictions imposed by external third parties.
Nonexpendable restricted net position consists of endowment and similar type funds in which donors or other
outside sources have stipulated, as a condition of the gift instrument, that the principal is to be maintained inviolate
and in perpetuity and invested for the purpose of producing present and future income, which may either be
expended or added to principal. At June 30, 2018, there is no balance of nonexpendable restricted net position.
Unrestricted net position: Unrestricted net position represent resources derived from student tuition and fees, State
apportionments, and sales and services of educational departments and auxiliary enterprises. These resources are
used for transactions relating to the educational and general operations of the District, and may be used at the
discretion of the governing board to meet current expenses for any purpose.
When an expense is incurred that can be paid using either restricted or unrestricted resources, the District's policy
is to first apply the expense toward restricted resources, and then towards unrestricted resources.
State Apportionments
Certain current year apportionments from the State are based on various financial and statistical information of the
previous year. Any prior year corrections due to a recalculation will be recorded in the year computed by the State.
Classification of Revenue and Expenses
The District has classified its revenues as either operating or nonoperating revenues. Certain significant revenue
streams relied upon for operations are recorded as nonoperating revenues, as defined by GASB Cod. Sec. Co5.101
including State appropriations, local property taxes, and investment income. Nearly all the District's expenses are
from exchange transactions. Revenues and expenses are classified according to the following criteria:
Operating revenues and expenses: Operating revenues include activities that have the characteristics of exchange
transactions, such as (1) student tuition and fees, net of scholarship discounts and allowances, (2) sales and services
of auxiliary enterprises, (3) most Federal, State and local grants and contracts and Federal appropriations. All
expenses are considered operating expenses except for interest expense on capital related debt.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2018
25
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Classification of Revenue and Expenses, continued
Nonoperating revenues and expenses: Nonoperating revenues include activities that have the characteristics of
nonexchange transactions, such as Pell grants, gifts and contributions, and other revenue sources described in GASB
Cod. Sec. Co5.101, such as State appropriations and investment income. Interest expense on capital related debt is
the only non-operating expense.
Scholarship Discounts and Allowances
Student tuition and fee revenues are reported net of the Board of Governors fee waivers and allowances in the
statement of revenues, expenses and change in net position. Certain governmental grants, and other federal, state
and nongovernmental programs are recorded as operating revenues, while Federal Pell Grants are classified as non-
operating revenues in the District’s financial statements. To the extent that revenues from such programs are used
to satisfy tuition and fees and other student charges, the District has recorded a scholarship discount and allowance.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions. These estimates and assumptions
affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenditures during the reporting period.
Accordingly, actual results may differ from those estimates.
Change in Accounting Principles
In June 2015, the GASB issued Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits
Other Than Pension. The primary objective of this Statement is to improve accounting and financial reporting by
State and local governments for postemployment benefits other than pensions (other postemployment benefits or
OPEB). It also improves information provided by State and local governmental employers about financial support
for OPEB that is provided by other entities. This Statement results from a comprehensive review of the effectiveness
of existing standards of accounting and financial reporting for all postemployment benefits (pensions and OPEB)
with regard to providing decision-useful information, supporting assessments of accountability and inter-period
equity, and creating additional transparency.
This Statement replaces the requirements of GASB Statements No. 45, Accounting and Financial Reporting by
Employers for Postemployment Benefits Other Than Pensions, as amended, and No. 57, OPEB Measurements by Agent
Employers and Agent Multiple-Employer Plans, for OPEB. GASB Statement No. 74, Financial Reporting for
Postemployment Benefit Plans Other Than Pension Plans, establishes new accounting and financial reporting
requirements for OPEB plans.
The requirements of this Statement are effective for financial statements for periods beginning after June 30, 2017.
The District has implemented GASB Statement No. 75 as of June 30, 2018.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2018
26
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
New Accounting Pronouncements
In November 2016, the GASB issued Statement No. 83, Certain Asset Retirement Obligations. This Statement
addresses accounting and financial reporting for certain asset retirement obligations (AROs). An ARO is a legally
enforceable liability associated with the retirement of a tangible capital asset. A government that has legal
obligations to perform future asset retirement activities related to its tangible capital assets should recognize a
liability based on the guidance in this Statement.
This Statement establishes criteria for determining the timing and pattern of recognition of a liability and a
corresponding deferred outflow of resources for AROs. This Statement requires that recognition occur when the
liability is both incurred and reasonably estimable. The determination of when the liability is incurred should be
based on the occurrence of external laws, regulations, contracts, or court judgments, together with the occurrence
of an internal event that obligates a government to perform asset retirement activities. Laws and regulations may
require governments to take specific actions to retire certain tangible capital assets at the end of the useful lives of
those capital assets, such as decommissioning nuclear reactors and dismantling and removing sewage treatment
plants. Other obligations to retire tangible capital assets may arise from contracts or court judgments. Internal
obligating events include the occurrence of contamination, placing into operation a tangible capital asset that is
required to be retired, abandoning a tangible capital asset before it is placed into operation, or acquiring a tangible
capital asset that has an existing ARO.
The requirements of this Statement are effective for reporting periods beginning after June 15, 2018. Early
implementation is encouraged.
In January 2017, the GASB issued Statement No. 84, Fiduciary Activities. The objective of this Statement is to improve
guidance regarding the identification of fiduciary activities for accounting and financial reporting purposes and how
those activities should be reported.
This Statement establishes criteria for identifying fiduciary activities of all State and local governments. The focus of
the criteria generally is on (1) whether a government is controlling the assets of the fiduciary activity and (2) the
beneficiaries with whom a fiduciary relationship exists. Separate criteria are included to identify fiduciary component
units and postemployment benefit arrangements that are fiduciary activities.
The requirements of this Statement are effective for reporting periods beginning after December 15, 2018. Early
implementation is encouraged.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2018
27
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
New Accounting Pronouncements, continued
In June 2017, the GASB issued Statement No. 87, Leases. The objective of this Statement is to better meet the
information needs of financial statement users by improving accounting and financial reporting for leases by
governments. This Statement increases the usefulness of governments' financial statements by requiring recognition
of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as
inflows of resources or outflows of resources based on the payment provisions of the contract. It establishes a single
model for lease accounting based on the foundational principle that leases are financings of the right to use an
underlying asset. Under this Statement, a lessee is required to recognize a lease liability and an intangible right-to-
use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby
enhancing the relevance and consistency of information about governments' leasing activities.
The requirements of this Statement are effective for the reporting periods beginning after December 15, 2019. Early
implementation is encouraged.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2018
28
NOTE 2 - CASH AND INVESTMENTS
District cash and investments at June 30, 2018, consisted of the following:
Governmental Funds:
County treasurer's investment pool 134,664,975$
Cash on hand and in banks 7,560,155
Cash with fiscal agents 23,896,730
Total cash and investments - Governmental Funds 166,121,860$
Fiduciary Funds:
County treasurer's investment pool 1,387,460$
Cash on hand and in banks 1,199,711
Cash with fiscal agents 1,744,883
Total cash and investments - Fiduciary Funds 4,332,054$
Mutual Funds: Investments held within the OPEB trust fund at June 30, 2017, consisted of the following:
Mutual funds - equity 965,589$
Mutual funds - fixed income 680,819
Mutual funds - real estate 98,475
Total investments 1,744,883$
Cash in County Treasury
In accordance with Education Code Section 41001, the District maintains substantially all of its cash in the County
Treasurer's Investment Fund. The District is considered to be an involuntary participant in an external investment
pool. The fair value of the District's investment in the pool is reported in the financial statements at amounts based
upon the District's pro-rata share of the fair value provided by the County Treasurer for the entire portfolio (in
relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting
records maintained by the County Treasurer, which is recorded on the amortized cost basis.
Custodial Credit Risk
The California Government Code requires California banks and savings and loan associations to secure the District's
deposits by pledging government securities as collateral. The fair value of pledged securities must equal 110 percent
of an agency's deposits. California law also allows financial institutions to secure an agency's deposits by pledging
first trust deed mortgage notes having a value of 150 percent of an agency's total deposits and collateral is
considered to be held in the name of the District. All cash held by financial institutions is entirely insured or
collateralized.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2018
29
NOTE 2 - CASH AND INVESTMENTS, continued
Custodial Credit Risk, continued
The District limits custodial credit risk by ensuring uninsured balances are collateralized by the respective financial
institution. As of June 30, 2018, the District's bank balance was fully collateralized with eligible collateral in
accordance with California Government Code Section 53651.
Cash with Fiscal Agent
Cash with Fiscal Agent represents amounts held in the District's name with third party custodians for future
construction projects and repayment of long-term liabilities. Funds are held in the County Treasury. The balance
available for withdrawal is based on the accounting records maintained by the County Treasurer, which is recorded
on the amortized cost basis.
Interest Rate Risk
The District investment policies do not limit cash and investment maturities as a means of managing their exposure
to fair value losses arising from increasing interest rates. At June 30, 2018, the District had no significant interest
rate risk related to cash and investments held.
Credit Risk
Under provision of the District's policies and in accordance with Sections 53601 and 53602 of the California
Government code, the District may invest in the following types of investments:
• Local agency bonds, notes or warrants within the state
• Securities of the U.S. Government or its agencies
• Certificates of Deposit with commercial banks
• Commercial paper
• Repurchase Agreements
Concentration of Credit Risk
The District does not place limits on the amount they may invest in any one issuer. At June 30, 2018, the District
had no concentration of credit risk.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2018
30
NOTE 3 – FAIR VALUE MEASUREMENTS
Fair Value Hierarchy
Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the
principal or most advantageous market for the asset or liability in an orderly transaction between market participants
on the measurement date. There are three levels of inputs that may be used to measure fair values:
Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability
to access as of the measurement date
Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or
liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated
by observable market data.
Fair Value Hierarchy, continued
Level 3: Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that
market participants would use in pricing an asset or liability.
Assets Recorded at Fair Value
The following table presents information about the District’s assets measured at fair value on a recurring basis as of
June 30, 2018:
OPEB Trust Investments Total Level 1 Level 2 Level 3
Mutual funds - equity 965,589$ 965,589$ -$ -$
Mutual funds - fixed income 680,819 680,819 - -
Mutual funds - real estate 98,475 98,475 - -
Total investments 1,744,883$ 1,744,883$ -$ -$
Mutual funds were valued at closing prices from securities exchanges and are classified as Level 1 investments.
During the year ended June 30, 2018, there were no significant transfers in or out of Level 1.
There were no assets or liabilities measured at fair value on a non-recurring basis at June 30, 2018.
NOTE 4 - RECEIVABLES
Accounts receivable for the District consisted primarily of intergovernmental grants, entitlements, interest and other
local sources. As of June 30, 2018, accounts receivable amounted to $2,916,977. The District believes all receivables
accrued at June 30, 2018 are collectable.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2018
31
NOTE 5 - CAPITAL ASSETS
Capital asset activity consists of the following:
Balance Balance
July 1, 2017 Additions Deductions June 30, 2018
Capital Assets not being Depreciated
Land 2,430,691$ -$ -$ 2,430,691$
Construction in progress 145,605,788 610,245 98,758,939 47,457,094
Total Capital Assets not being Depreciated 148,036,479 610,245 98,758,939 49,887,785
Capital Assets being Depreciated
Buildings & improvements 155,737,325 117,788,122 - 273,525,447
Machinery & equipment 13,725,217 - - 13,725,217
Total Capital Assets being Depreciated 169,462,542 117,788,122 - 287,250,664
Total Capital Assets 317,499,021 118,398,367 98,758,939 337,138,449
Less Accumulated Depreciation
Buildings & improvements 25,681,679 10,895,425 - 36,577,104
Machinery & equipment 8,525,105 918,602 - 9,443,707
Accumulated Depreciation 34,206,784 11,814,027 - 46,020,811
Net Capital Assets 283,292,237$ 106,584,340$ 98,758,939$ 291,117,638$
NOTE 6 - LONG TERM LIABILITIES
General Obligation Bonds
In August 2007, the District issued the General Obligation Bonds Series 2004B and Series 2004C in the amounts of
$52,536,256 and $56,460,276, respectively. The Series 2004B bonds consisted of Capital Appreciation bonds totaling
$12,231,256 and Current Interest Bonds totaling $40,305,000. The Series 2004B bonds were refunded during the
year ended June 30, 2015. The Series 2004C bonds consisted of Capital Appreciation bonds of $14,375,276 and
Current Interest bonds of $42,085,000. The Series 2004C bonds were partially refunded during the years ended June
30, 2014 and June 30, 2015. The remaining Series C 2004C bonds mature through August 2017 with an interest rate
of 5.0%. The final payment of $1,080,000 was paid during the 2017-18 year.
In April 2014, the District issued $42,845,000 and $16,465,000 of 2014 General Obligation Refunding Bonds Series
A and Series B, respectively. The proceeds from the sale of the bonds were used to advance refund the District's
outstanding General Obligation Bonds Series 2004C and 2006 General Obligation Refunding Bonds, and to pay the
costs of issuing the 2014 Refunding Bonds. The 2014 Refunding Bonds Series A and Series B mature through August
1, 2027 and August 1, 2022, respectively, with interest rates ranging from 0.5% to 5.0%. At June 30, 2018,
$58,036,459 of bonds outstanding are considered defeased.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2018
32
NOTE 6 - LONG TERM LIABILITIES, continued
The annual payments required to amortize the 2014 General Obligation Refunding Bonds Series A and Series B as
of June 30, 2018, are as follows:
Series A:
Fiscal Year Principal Interest Total
2019 1,410,000$ 2,001,950$ 3,411,950$
2020 1,550,000 1,973,750 3,523,750
2021 1,700,000 1,942,750 3,642,750
2022 1,905,000 1,857,750 3,762,750
2023 2,115,000 1,762,500 3,877,500
2024-2028 33,610,000 5,315,000 38,925,000
42,290,000$ 14,853,700$ 57,143,700$
Series B:
Fiscal Year Principal Interest Total
2019 2,345,000$ 378,550$ 2,723,550$
2020 2,520,000 332,729 2,852,729
2021 2,700,000 272,652 2,972,652
2022 2,910,000 195,918 3,105,918
2023 3,150,000 104,486 3,254,486
13,625,000$ 1,284,335$ 14,909,335$
In January 2015, the District issued $77,818,682 of 2015 General Obligation Refunding Bonds. The proceeds from
the sale of the bonds were used to advance refund the District's outstanding General Obligation Bonds Series 2004B
and Series 2004C, and to pay the costs of issuing the 2015 Refunding Bonds. The 2015 Refunding Bonds were
issued as $40,880,000 in Current Interest bonds with interest rates ranging from 2.0% to 5.0% and $36,938,682 in
Capital Appreciation bonds with interest accreting at rates ranging from 3.9% to 4.1%. The 2015 Refunding Bonds
mature through August 1, 2039.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2018
33
NOTE 6 - LONG TERM LIABILITIES, continued
The annual payments required to amortize the 2015 General Obligation Refunding Bonds as of June 30, 2018, are
as follows:
Fiscal Year Principal Interest Accreted Interest Total
2019 -$ 2,037,250$ -$ 2,037,250$
2020 - 2,037,250 - 2,037,250
2021 - 2,037,250 - 2,037,250
2022 - 2,037,250 - 2,037,250
2023 - 2,037,250 - 2,037,250
2024-2028 - 10,186,250 - 10,186,250
2029-2033 25,131,157 9,106,250 17,578,843 51,816,250
2034-2038 28,062,525 8,836,250 22,767,475 59,666,250
2039-2040 24,490,000 1,860,750 - 26,350,750
Accretion 5,498,960 - (5,498,960) -
83,182,642$ 40,175,750$ 34,847,358$ 158,205,750$
In March 2017, the District issued $116,385,000 of 2016 Series A General Obligation Bonds. The 2016 Series A Bonds
were issued as $23,745,000 of Serial Bonds with interest rates from 3.75% to 5.00% and $92,640,000 of Term Bonds
with interest rates from 4.0% to 5.25%.
The 2016 Series A Bonds mature through August 1, 2046. The annual payments required to amortize the 2016
Series A Bonds as of June 30, 2018, are as follows:
Fiscal Year Principal Interest Total
2019 -$ 5,351,750$ 5,351,750$
2020 - 5,351,750 5,351,750
2021 - 5,351,750 5,351,750
2022 - 5,351,750 5,351,750
2023 - 5,351,750 5,351,750
2024-2028 - 26,758,750 26,758,750
2029-2033 9,990,000 26,136,250 36,126,250
2034-2038 23,945,000 22,121,300 46,066,300
2039-2043 37,230,000 15,263,900 52,493,900
2044-2047 45,220,000 4,705,000 49,925,000
116,385,000$ 121,743,950$ 238,128,950$
In March 2017, the District issued $33,615,000 of 2016 Series A-1 General Obligation Bonds. The 2016 Series A-1
Bonds were issued as Serial Bonds with interest rates from 1.42% to 3.48%.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2018
34
NOTE 6 - LONG TERM LIABILITIES, continued
The 2016 Series A-1 Bonds mature through August 1, 2028. The annual payments required to amortize the 2016
Series A-1 Bonds as of June 30, 2018, are as follows:
Fiscal Year Principal Interest Total
2019 6,400,000$ 1,137,681$ 7,537,681$
2020 4,270,000 760,607 5,030,607
2021 2,550,000 689,298 3,239,298
2022 1,500,000 636,869 2,136,869
2023-2027 11,750,000 2,431,347 14,181,347
2028-2029 7,145,000 377,322 7,522,322
33,615,000$ 6,033,124$ 39,648,124$
Certificates of Participation:
In June 2010, the District entered into a lease agreement in the amount of $10,000,000 with Los Angeles County
Schools Regionalized Business Services Corporation to finance the cost of construction of solar energy projects. The
COPs with an interest rate ranging from 3.0% to 5.25% mature in varying amounts through 2035.
Capital Lease
In November 2010, the District entered into a master equipment lease purchase agreement to provide tax-exempt
financing for certain energy related projects. These projects consisted of the addition to the North Central utility
plant, building lighting retrofits, exterior lighting upgrades, supervisory controls, re-commissioning, computer
power management, variable speed pool pump and irrigation system controls upgrade. At June 30, 2018, the assets
held under this agreement totaled $15,329,303 and are still in process of completion; as a result, no accumulated
depreciation has been recognized.
At June 30, 2018, the future minimum lease payments are as follows:
Fiscal Year Lease Payments
2019 749,206$
2020 805,168
2021 864,438
2022-2026 4,315,639
Total 6,734,451
Less: Amount representing Interest (1,361,528)
Present Value of Net Minimum Lease Payments 5,372,923$
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2018
35
NOTE 6 - LONG TERM LIABILITIES, continued
Change in Long-Term Liabilities:
A schedule of changes in long-term liabilities for the year ended June 30, 2018 is as follows:
Restated Payments Ending Amounts Due
Balance and Balance Within
July 1, 2017 Additions Reductions June 30, 2018 One Year
General obligation bonds 290,816,359$ 1,711,283$ 3,430,000$ 289,097,642$ 10,155,000$
Bond premium 21,654,628 - 1,168,815 20,485,813 1,168,815
Lease revenue bonds 13,000,000 - 13,000,000 - -
Certificates of participation 7,545,000 - 7,545,000 - -
Capital lease 5,748,684 - 375,761 5,372,923 -
Banked faculity load time 165,916 - 34,101 131,815 -
Compensated absences 1,748,577 99,829 - 1,848,406 -
Net pension liability 63,960,830 8,765,690 - 72,726,520 -
Other postemployment benefits 5,205,930 933,697 - 6,139,627 -
Total Long Term Debt 409,845,924$ 11,510,499$ 25,553,677$ 395,802,746$ 11,323,815$
NOTE 7 - PROPERTY TAXES
All property taxes are levied and collected by the Tax Assessor of the County of Los Angeles and paid upon collection
to the various taxing entities including the District. Secured taxes are levied on July 1 and are due in two installments
on November 1 and February 1, and become delinquent on December 10 and April 10, respectively. The lien date
for secured and unsecured property taxes is March 1 of the preceding fiscal year.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2018
36
NOTE 8 - NET PENSION LIABILITY
Qualified employees are covered under multiple-employer contributory retirement plans maintained by agencies of
the State of California. Certificated employees are member of the California State Teachers’ Retirement System
(CalSTRS), and Classified employees are members of the California Public Employees’ Retirement System (CalPERS).
The District reported its proportionate share of the net pension liabilities, pension expense, deferred outflow of
resources, and deferred inflow of resources for each of the above plans as follows:
Collective Collective
Collective Net Deferred Outflows Deferred Inflows Collective
Pension Plan Pension Liability of Resources of Resources Pension Expense
CalSTRS 42,212,558$ 11,924,404$ 5,948,453$ 4,398,450$
CalPERS 30,513,962 8,622,739 642,048 6,126,455
Total 72,726,520$ 20,547,143$ 6,590,501$ 10,524,905$
Pension Plans – California Public Employees’ Retirement System (CalPERS)
General Information about the Pension Plan
Plan Description – Qualified employees are eligible to participate in the School Employer Pool (SEP) under the
California Public Employees' Retirement System (CalPERS), a cost-sharing multiple-employer public employee
retirement system defined benefit pension plan administered by CalPERS. Benefit provisions are established by State
statutes, as legislatively amended, within the Public Employees' Retirement Law.
A full description of the pension plan regarding benefit provisions, assumptions (for funding, but not accounting
purposes), and membership information is listed in the June 30, 2015 annual actuarial valuation report, Schools Pool
Actuarial Valuation, 2015. This report and CalPERS audited financial information are publically available reports that
can be found on the CalPERS website under Forms and Publications at: https://www.calpers.ca.gov/page/forms-
publications.
Benefits Provided – CalPERS provides service retirement and disability benefits, annual cost of living adjustments
and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years
of service credit, a benefit factor and the member's final compensation. Members hired on or before December 31,
2012, with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. Members hired
on or after January 1, 2013, with five years of total service are eligible to retire at age 52 with statutorily reduced
benefits. All members are eligible for non-duty disability benefits after five years of service. The Basic Death Benefit
is paid to any member's beneficiary if the member dies while actively employed. An employee's eligible survivor
may receive the 1957 Survivor Benefit if the member dies while actively employed, is at least age 50 (or 52 for
members hired on or after January 1, 2013), and has at least five years of credited service. The cost of living
adjustments for each plan are applied as specified by the Public Employees' Retirement Law.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2018
37
NOTE 8 - NET PENSION LIABILITY, continued
Pension Plans – California Public Employees’ Retirement System (CalPERS), continued
General Information about the Pension Plan, continued
The CalPERS provisions and benefits in effect at June 30, 2018, are summarized as follows:
On or before On or after
Hire date December 31, 2012 January 1, 2013
Benefit formula 2% at 55 2% at 62
Benefit vesting schedule 5 years of service 5 years of service
Benefit payments Monthly for life Monthly for life
Retirement age 55 62
Monthly benefits as a percentage of eligible compensation 1.1% - 2.5% 1.0% - 2.5%
Required employee contribution rate 7.000% 6.000%
Required employer contribution rate 13.89% 13.89%
School Employer Pool (CalPERS)
Contributions – Section 20814(c) of the California Public Employees' Retirement Law requires that the employer
contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective
on the July 1 following notice of a change in the rate. Total plan contributions are calculated through the CalPERS
annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the
costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued
liability. The District is required to contribute the difference between the actuarially determined rate and the
contribution rate of employees. The contributions rates are expressed as percentage of annual payroll. The
contribution rates for each plan for the year ended June 30, 2018, are presented above and the total District
contributions were $2,672,980.
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to CalPERS
As of June 30, 2018, the District reported net pension liabilities for its proportionate share of the CalPERS net pension
liability totaling $30,513,962. The net pension liability was measured as of June 30, 2016. The District's proportion
of the net pension liability was based on a projection of the District's long-term share of contributions to the pension
plan relative to the projected contributions of all participating school districts, actuarially determined. The District's
proportionate share for the measurement period June 30, 2018 and June 30, 2017, respectively was 0.1278 percent
and 0.1275 percent, resulting in a net increase in the proportionate share of 0.0003 percent.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2018
38
NOTE 8 - NET PENSION LIABILITY, continued
Pension Plans – California Public Employees’ Retirement System (CalPERS), continued
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to CalPERS, continued
For the year ended June 30, 2018, the District recognized pension expense of $6,126,455. At June 30, 2018, the
District reported deferred outflows of resources and deferred inflows of resources related to pensions from the
following sources:
Deferred Outflows of
Resources
Deferred Inflows of
Resources
Difference between projected and actual earnings on
plan investments 425,440$ -$
Differences between expected and actual experience 1,087,013 -
Changes in assumptions 4,418,949 358,138
Net changes in proportionate share of net pension liability 18,357 283,910
District contributions subsequent to the measurement date 2,672,980 -
Total 8,622,739$ 642,048$
The deferred outflows of resources related to pensions resulting from District contributions subsequent to the
measurement date will be recognized as a reduction of the net pension liability in the subsequent fiscal year. The
deferred outflows/(inflows) of resources related to pensions will be recognized as follows:
Deferred
Outflows/(Inflows)
Year Ended June 30, of Resources
2019 2,006,777$
2020 2,021,021
2021 1,913,941
2022 (634,028)
5,307,711$
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2018
39
NOTE 8 - NET PENSION LIABILITY, continued
Pension Plans – California Public Employees’ Retirement System (CalPERS), continued
Actuarial assumptions. For the measurement period ended June 30, 2017 (the measurement date), the total
pension liability was determined by rolling forward the June 30, 2016 total pension liability. The June 30, 2016 and
the June 30, 2017 total pension liabilities were based on the following actuarial methods and assumptions:
Valuation date June 30, 2016
Measurement date June 30, 2017
Experience study July 1, 1997, through June 30, 2011
Actuarial cost method Entry Age Normal
Discount rate 7.15%
Investment rate of return 7.15%
Consumer price inflation 2.75%
Wage growth Varies by entry age and service
Mortality assumptions are based on mortality rates resulting from the most recent CalPERS experience study
adopted by the CalPERS Board. For purposes of the post-retirement mortality rates, those revised rates include five
years of projected ongoing mortality improvement using Scale AA published by the Society of Actuaries. In
determining the long-term expected rate of return, CalPERS took into account both short-term and long-term
market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds'
asset classes, expected compound returns were calculated over the short-term (first ten years) and the long-term
(11-60 years) using a building-block approach. Using the expected nominal returns for both short-term and long-
term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating
the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one
calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the
single equivalent rate calculated above and rounded down to the nearest one quarter of one percent.
The table below reflects long-term expected real rate of return by asset class. The rate of return was calculated using
the capital market assumptions applied to determine the discount rate and asset allocation. These geometric rates
of return are net of administrative expenses:
Asset Class
Assumed Asset
Allocation
Global Equity 47%
Fixed Income 19%
Inflation Assets 6%
Private Equity 12%
Real Estate 11%
Infrastructure and Forestland 3%
Liquidity 2%
100%
*An expected inflation of 2.5% used for this period
**An expected inflation of 3.0% used for this period
6.60% 6.63%
2.80% 5.21%
3.90% 5.36%
-0.40% -0.90%
4.90% 5.38%
0.80% 2.27%
0.60% 1.39%
Real Return
Years 1 - 10*
Real Return
Years 11+**
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2018
40
NOTE 8 - NET PENSION LIABILITY, continued
Pension Plans – California Public Employees’ Retirement System (CalPERS), continued
Discount Rate - The discount rate used to measure the total pension liability was 7.15 percent. A projection of the
expected benefit payments and contributions was performed to determine if assets would run out. The test revealed
the assets would not run out. Therefore, the long-term expected rate of return on pension plan investments was
applied to all periods of projected benefit payments to determine the total pension liability for the Schools Pool.
The results of the crossover testing for the Schools Pool are presented in a detailed report that can be obtained at
CalPERS’ website.
Pension Plans – California Public Employees’ Retirement System (CalPERS), continued
Sensitivity of the District’s proportionate share of the net pension liability to changes in the discount rate -
The following presents the District’s proportionate share of the net pension liability calculated using the discount
rate of 7.15 percent, as well as what the District’s proportionate share of the net pension liability would be if it were
calculated using a discount rate that is in the following table:
1% Current 1%
Decrease Discount Rate Increase
(6.15%) (7.15%) (8.15%)
Plan's net pension liability 44,895,816$ 30,513,962$ 18,583,009$
Pension plan fiduciary net position. Detailed information about the pension plan’s fiduciary net position is
available in the separately issued CalPERS CAFR at https://www.calpers.ca.gov.
Pension Plans – California State Teachers’ Retirement System (CalSTRS)
General Information about the Pension Plan
Plan Description – The District contributes to the State Teachers Retirement Plan (STRP) administered by the
California State Teachers' Retirement System (CalSTRS). STRP is a cost-sharing multiple-employer public employee
retirement system defined benefit pension plan. Benefit provisions are established by State statutes, as legislatively
amended, within the State Teachers' Retirement Law.
A full description of the pension plan regarding benefit provisions, assumptions (for funding, but not accounting
purposes), and membership information is listed in the June 30, 2015, annual actuarial valuation report, Defined
Benefit Program Actuarial Valuation. This report and CalSTRS audited financial information are publicly available
reports that can be found on the CalSTRS website under Publications at: http://www.calstrs.com/member-
publications.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2018
41
NOTE 8 - NET PENSION LIABILITY, continued
Pension Plans – California State Teachers’ Retirement System (CalSTRS), continued
Benefits Provided - The STRP provides retirement, disability and survivor benefits to beneficiaries. Benefits are
based on members' final compensation, age and years of service credit. Members hired on or before December 31,
2012, with five years of credited service are eligible for the normal retirement benefit at age 60. Members hired on
or after January 1, 2013, with five years of credited service are eligible for the normal retirement benefit at age 62.
The normal retirement benefit is equal to 2.0 percent of final compensation for each year of credited service.
The STRP is comprised of four programs: Defined Benefit Program, Defined Benefit Supplement Program, Cash
Balance Benefit Program and Replacement Benefits Program. The STRP holds assets for the exclusive purpose of
providing benefits to members and beneficiaries of these programs. CalSTRS also uses plan assets to defray
reasonable expenses of administering the STRP. Although CalSTRS is the administrator of the STRP, the state is the
sponsor of the STRP and obligor of the trust. In addition, the state is both an employer and nonemployer
contributing entity to the STRP.
The District contributes exclusively to the STRP Defined Benefit Program; thus, disclosures are not included for the
other plans. The STRP provision and benefits in effect as June 30, 2018 are summarized as follows:
On or before On or after
Hire date December 31, 2012 January 1, 2013
Benefit formula 2% at 60 2% at 62
Benefit vesting schedule 5 years of service 5 years of service
Benefit payments Monthly for life Monthly for life
Retirement age 60 62
Monthly benefits as a percentage of eligible compensation 2.0% - 2.4% 2.0% - 2.4%
Required employee contribution rate 10.25% 9.205%*
Required employer contribution rate 14.43% 14.43%
Required state contribution rate 9.328% 9.328%
*The rate imposed on CalSTRS 2% at 62 members assuming no change in the normal cost of benefits.
STRP Defined Benefit Plan
Contributions - Required member, District and State of California contributions rates are set by the California
Legislature and Governor and detailed in Teachers' Retirement Law. The contributions rates are expressed as a level
percentage of payroll using the entry age normal actuarial method. In accordance with AB 1469, employer
contributions into the CalSTRS will be increasing to a total of 19.1 percent of applicable member earnings phased
over a seven-year period. The contribution rates for each plan for the year ended June 30, 2018, are presented above
and the District's total contributions were $3,948,124.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2018
42
NOTE 8 - NET PENSION LIABILITY, continued
Pension Plans – California State Teachers’ Retirement System (CalSTRS), continued
On-Behalf Payments - The District was the recipient of on-behalf payments made by the State of California to
CalSTRS for community college education. These payments consist of state general fund contributions of
approximately $1,800,391.
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to CalSTRS
At June 30, 2018, the District reported a liability for its proportionate share of the net pension liability that reflected
a reduction for State pension support provided to the District. The amount recognized by the District as its
proportionate share of the net pension liability, the related state support and the total portion of the net pension
liability that was associated with the District were as follows:
Total net pension liability, including state share:
District's proportionate share of the net pension liability 42,212,558$
State's proportionate share of the net pension liability
associated with the District 24,972,796
Total 67,185,354$
The net pension liability was measured as of June 30, 2018. The District's proportion of the net pension liability was
based on a projection of the District's long-term share of contributions to the pension plan relative to the projected
contributions of all participating school districts and the State, actuarially determined. The District's proportionate
share for the measurement period June 30, 2018 and June 30, 2017, respectively, was 0.0457 percent and 0.0480
percent, resulting in a net decrease in the proportionate share of 0.0023 percent.
For the year ended June 30, 2018, the District recognized pension expense of $4,398,450. At June 30, 2018, the
District reported deferred outflows of resources and deferred inflows of resources related to pensions from the
following sources:
Deferred Outflows of
Resources
Deferred Inflows of
Resources
Difference between projected and actual earnings on
plan investments -$ 1,929,412$
Differences between expected and actual experience 156,106 797,409
Changes in assumptions 7,820,174 -
Net changes in proportionate share of net pension liability - 3,221,632
District contributions subsequent to the measurement date 3,948,124 -
Total 11,924,404$ 5,948,453$
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2018
43
NOTE 8 - NET PENSION LIABILITY, continued
Pension Plans – California State Teachers’ Retirement System (CalSTRS), continued
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to CalSTRS, continued
The deferred outflows of resources related to pensions resulting from District contributions subsequent to the
measurement date will be recognized as a reduction of the net pension liability in the subsequent fiscal year. The
deferred outflows/(inflows) of resources related to pensions will be recognized as follows:
Deferred
Outflows/(Inflows)
Year Ended June 30, of Resources
2019 (117,551)$
2020 (117,551)
2021 584,198
2022 (572,241)
2023 921,592
Thereafter 1,329,380
2,027,827$
Actuarial Assumptions - The total pension liability for the STRP was determined by applying update procedures
to a financial reporting actuarial valuation as of June 30, 2016, and rolling forward the total pension liability to
June 30, 2017. The financial reporting actuarial valuation as of June 30, 2016, used the following actuarial methods
and assumptions, applied to all prior periods included in the measurement:
Valuation date June 30, 2016
Measurement date June 30, 2017
Experience study July 1, 2010, through June 30, 2015
Actuarial cost method Entry Age Normal
Discount rate 7.10%
Investment rate of return 7.10%
Consumer price inflation 2.75%
Wage growth 3.50%
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2018
44
NOTE 8 - NET PENSION LIABILITY, continued
Pension Plans – California State Teachers’ Retirement System (CalSTRS), continued
The long-term expected rate of return on pension plan investments was determined using a building-block method
in which best estimate ranges of expected future real rates of return (expected returns, net of pension plan
investment expense and inflation) are developed for each major asset class. The best estimate ranges were
developed using capital market assumptions from CalSTRS general investment consultant. Based on the model for
CalSTRS consulting actuary's investment practice, a best estimate range was determined by assuming the portfolio
is re-balanced annually and that the annual returns are lognormally distributed and independent from year to year
to develop expected percentiles for the long-term distribution of annualized returns.
The assumed asset allocation is based on Teachers' Retirement Board of the California State Teachers' Retirement
System (board) policy for target asset allocation in effect on February 2, 2012, the date the current experience study
was approved by the board. Best estimates of 20-year geometric real rates of return and the assumed asset
allocation for each major asset class used as input to develop the actuarial investment rate of return are summarized
in the following table:
Asset Class
Assumed Asset
Allocation
Global Equity 47%
Fixed Income 12%
Real Estate 13%
Private Equity 13%
Cash/Liquidity 2%
Absolute Return/Risk Mitigation Strategies 9%
Inflation Sensitive 4%
100%
*20-year geometric average
3.80%
6.30%
0.30%
5.20%
9.30%
-1.00%
2.90%
Long-term Expected
Real Rate of Return*
Discount rate - The discount rate used to measure the total pension liability was 7.10 percent. The projection of
cash flows used to determine the discount rate assumed that contributions from plan members and employers will
be made at statutory contribution rates in accordance with the rate increase per Assembly Bill 1469. Projected
inflows from investment earnings were calculated using the long-term assumed investment rate of return (7.10
percent) and assuming that contributions, benefit payments, and administrative expense occur midyear. Based on
those assumptions, the STRP’s fiduciary net position was projected to be available to make all projected future
benefit payments to current plan members. Therefore, the long-term assumed investment rate of return was applied
to all periods of projected benefit payments to determine the total pension liability.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2018
45
NOTE 8 - NET PENSION LIABILITY, continued
Pension Plans – California State Teachers’ Retirement System (CalSTRS), continued
Sensitivity of the District’s proportionate share of the net pension liability to changes in the discount rate
The following presents the District’s proportionate share of the net pension liability calculated using the discount
rate of 7.10% percent, as well as what the District’s proportionate share of the net pension liability would be if it
were calculated using a discount rate that is 1-percentage-point lower (6.10%) or 1-percentage-point higher (8.10%)
than the current rate:
1% Current 1%
Decrease Discount Rate Increase
(6.10%) (7.10%) (8.10%)
Plan's net pension liability 61,981,436$ 42,212,558$ 26,168,773$
Pension plan fiduciary net position - Detailed information about the pension plan’s fiduciary net position is
available in the separately issued CalSTRS CAFR at http://www.calstrs.com/comprehensive-annual-financial-report.
NOTE 9 – POSTEMPLOYEMENT BENEFITS OTHER THAN PENSION BENEFITS (OPEB)
In addition to the pension benefits described in Note 8, the District provides post-retirement health care benefits
to employees and dependents that have reached the age of 55 and served the District at least 10 years. The District
pays medical, dental vision and life insurance premiums to maintain the level of coverage enjoyed by the retiree
immediately preceding retirement up until the age of 65 or death of the retiree.
The District's annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required
contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB
Cod. Sec. P50.108-.109. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to
cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to
exceed thirty years.
Plan Description - The single-employer OPEB plan is currently operated as a pay-as-you-go-plan. The District
makes discretionary, periodic contributions to the plan through an irrevocable trust. The OPEB trust is included in
the District's financial report and separately presented as a fiduciary fund. Separate audited financial statements
are also available through
Funding Policy - The District’s agreement with employees is for monthly contributions for members who
meet the eligibility criteria of their collective bargaining agreement and who retire during the term of the
contract. The contribution requirements of the District and plan members are established and may be
amended by the District’s Board of Trustees through the collective bargaining process. The members
receiving benefit contributions vary depending on the level of coverage selected.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2018
46
NOTE 9 – POSTEMPLOYEMENT BENEFITS OTHER THAN PENSION BENEFITS (OPEB), continued
Employees Covered by Benefit Term
The following is a table of plan participants at June 30, 2018:
Number of
Participants
Inactive Employees/Dependents Receiving Benefits 33
Active Employees 397
430
Contributions to Trust - Eligible employees are not permitted to make contributions to the Trust. The Plan
administrator (CalPERS) shall, on behalf of the employer (District), make all contribution to the Trustee. All
contributions shall be paid to the Trustee for investment and reinvestment pursuant to the terms of the trust
agreement. The District does not have contractually required contributions rates but contributes in an amount
sufficient to fully fund the total OPEB obligation over a period not to exceed 30 years. The District has a net OPEB
liability of $7,413,366 as of June 30, 2018.
Actuarial Assumptions - The total OPEB liability in the June 30, 2018 actuarial valuation was determined using the
following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:
Valuation date June 30, 2017
Measurement date June 30, 2017
Fiscal year July 1st to June 30th
Actuarial cost methods Entry age normal cost method
Inflation rate 2.75%
Investment rate of return 6.50%
Discount rate 6.50%
Health care cost trend rate 4.00%
Payroll increase 2.75%
Mortality For certificated employees the 2009 CalSTRS
mortality tables were used.
For classified employees the 2014 CalPERS
active mortality for miscellaneous employees
were used.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2018
47
NOTE 9 – POSTEMPLOYEMENT BENEFITS OTHER THAN PENSION BENEFITS (OPEB), continued
Changes in the Net OPEB Liability
Total OPEB Fiduciary Total OPEB
Liability Net Position Liability
(a) (b) (a) - (b)
Balance July 1, 2017 6,856,461$ 763,905$ 6,092,556$
Changes for the year:
Service cost 599,942 - 599,942
Interest 448,398 - 448,398
Employer contributions - 886,626 (886,626)
Net investment income - 125,965 (125,965)
Administrative expense - (11,322) 11,322
Benefit payments (499,512) (499,512) -
Net change 548,828 501,757 47,071
Balance June 30, 2018 7,405,289$ 1,265,662$ 6,139,627$
Increase/(Decrease)
Fiduciary Net Position as a percentage of the Total OPEB Liability as June 30, 2018 was 17.09 percent.
Sensitivity of the net pension liability to assumptions - The following presents the net OPEB liability calculated
using the discount rate of 6.50 percent. The schedule also shows what the net OPEB liability would be if it were
calculated using a discount rate that is 1 percent lower (5.50 percent) and 1 percent higher (7.50 percent):
Discount Rate Current Discount Rate
1% Lower Discount Rate 1% Higher
(5.50%) (6.50%) (7.50%)
Net OPEB liability 4,939,939$ 6,139,627$ 7,540,843$
The following table presents the net OPEB liability calculated using the heath care cost trend rate of 4.00 percent.
The schedule also shows what the net OPEB liability would be if it were calculated using a health care cost trend
rate that is 1 percent lower (3.00 percent) and 1 percent higher (5.00 percent):
Trend Rates Trend Rates Trend Rates
1% Lower Current Rate 1% Higher
(3.00%) (4.00%) (5.00%)
Net OPEB liability 6,593,034$ 6,139,627$ 5,728,327$
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2018
48
NOTE 10 - COMMITMENTS AND CONTINGENCIES
Contingent Liabilities
There are various claims and legal actions pending against the District for which no provision has been made in the
general-purpose financial statements. In the opinion of the District, any liabilities arising from these claims and
legal actions are not considered significant.
The District has received Federal and State funds for specific purposes that are subject to review or audit by the
grantor agencies. Although such audits could result in expenditure disallowances under terms of the grants, it is
management's opinion that any required reimbursements or future revenue offsets subsequently determined will
not have a material effect.
Construction Commitments
As of June 30, 2018, the District has approximately $23 million in outstanding commitments on construction
contracts.
NOTE 11 - JOINT POWERS AGREEMENTS
Antelope Valley Community College District participates in Joint Power Agreements (JPAs), with Protected Insurance
Program for Schools Joint Power Authority (PIPS), and Self Insurance Risk Management Authority II (SIRMA). Settled
claims have not exceeded commercial insurance coverage in any of the past three years. The relationship between
Antelope Valley Community College District and the JPAs is such that the JPAs are not component units of Antelope
Valley Community College District for financial reporting purposes.
The JPAs are governed by boards consisting of a representative from each member district. The boards control the
operations of the JPAs, including the selection of management and approval of operating budgets, independent of
any influence by the member district beyond their representation on the governing board. PIPS provides workers'
compensation insurance for its members. SIRMA provides property and liability insurance for its members.
Antelope Valley Community College District pays a premium commensurate with the level of coverage requested.
Member districts share surpluses and deficits proportionate to their participation in the JPAs. The JPAs are
independently accountable for their fiscal matters and maintain their own accounting records. Budgets are not
subject to any approval other than that of the governing board.
Condensed financial information of the JPAs for the most current year for which audited information is available, is
available by contacting each of the respective entities directly.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
STATEMENT OF NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2018
49
NOTE 12 – PRIOR PERIOD ADJUSTMENT
The beginning net position increased by $4,243,792. This was due to adjustments made to bring on the net OPEB
liabilities following the District’s implementation of GASB Statements No. 75 during the year ended June 30, 2018.
The total increase to beginning net position related to OPEB was $4,215,404. See Note 2, Summary of Significant
Accounting Policies, Change in Accounting Principles for further details on the implementation of GASB Statements
No. 75. The remaining amount of $28,388 related to District identified adjustments.
NOTE 13 – SUBSEQUENT EVENTS
The District evaluated subsequent events from June 30, 2018 through December 19, 2018, the date the financial
statements were issued. The District concluded that no subsequent events have occurred that would require
recognition or disclosure in the financial statements.
REQUIRED SUPPLEMENTARY
INFORMATION
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS
FOR THE YEAR ENDED JUNE 30, 2018
51
2018
Total OPEB liability
Service cost 599,942$
Interest on Total OPEB Liability 448,398
Benefit payments (499,512)
Net change in total OPEB liability 548,828
Total OPEB liability, beginning of year 6,856,461
Total OPEB liability, end of year (a) 7,405,289$
Plan fiduciary net position
Employer contributions 886,626$
Net investment income 125,965
Administrative expense (11,322)
Benefit payments (499,512)
Change in plan fiduciary net position 501,757
Fiduciary trust net position, beginning of year 763,905
Fiduciary trust net position, end of year (b) 1,265,662$
Net OPEB liability(asset), ending (a) - (b) 6,139,627$
Covered payroll 28,900,000$
Plan fiduciary net position as a percentage of
the total OPEB liability(asset) 17.09%
Net OPEB liability(asset) as a percentage of covered payroll 21.24%
This is a 10 year schedule, however the information in this schedule is not required to be
presented retrospectively.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
SCHEDULE OF CONTRIBUTIONS - OPEB
FOR THE YEAR ENDED JUNE 30, 2018
52
2018
Actuarially determined contribution 519,493$
Contributions in relations to the actuarially determined contribution 886,626
Contribution deficiency (excess) (367,133)$
Covered-employee payroll 28,900,000$
Contribution as a percentage of covered-employee payroll 3.07%
This is a 10 year schedule, however the information in this schedule is not required to be
presented retrospectively.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
FOR THE YEAR ENDED JUNE 30, 2018
53
CalSTRS 2018 2017 2016 2015
District's proportion of the net pension liability 0.046% 0.048% 0.051% 0.052%
District's proportionate share of the net pension liability 42,212,558$ 38,781,724$ 34,436,000$ 30,332,000$
State's proportionate share of the net pension liability
associated with the District 24,972,796 22,080,994 18,213,000 18,316,000
Total 67,185,354$ 60,862,718$ 52,649,000$ 48,648,000$
District's covered - employee payroll 27,360,527$ 27,033,792$ 23,741,000$ 23,119,000$
District's proportionate Share of the net pension liability as
percentage of covered-employee payroll 154.28% 143.46% 145.05% 131.20%
Plan fiduciary net position as a percentage of the
total pension liability 69.00% 70.04% 74.02% 76.52%
CalPERS 2018 2017 2016 2015
District's proportion of the net pension liability 0.128% 0.127% 0.127% 0.128%
District's proportionate share of the net pension liability 30,513,962$ 25,179,106$ 18,775,000$ 14,551,000$
District's covered - employee payroll 19,243,916$ 16,126,854$ 14,101,000$ 13,456,000$
District's proportionate Share of the net pension liability as
percentage of covered-employee payroll 158.56% 156.13% 133.15% 108.14%
Plan fiduciary net position as a percentage of the
total pension liability 71.90% 73.90% 79.43% 83.38%
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
SCHEDULE OF CONTRIBUTIONS - PENSIONS
FOR THE YEAR ENDED JUNE 30, 2018
54
CalSTRS 2018 2017 2016 2015
Statutorily required contribution 3,948,124$ 3,400,851$ 2,655,133$ 2,108,206$
District's contributions in relation to
the statutorily required contribution 3,948,124 3,400,851 2,655,133 2,108,206
District's contribution deficiency (excess) -$ -$ -$ -$
District's covered-employee payroll 27,360,527$ 27,033,792$ 24,745,000$ 23,741,000$
District's contributions as a percentage of
covered-employee payroll 14.43% 12.58% 10.73% 8.88%
CalPERS 2018 2017 2016 2015
Statutorily required contribution 2,672,980$ 2,240,020$ 1,832,600$ 1,659,877$
District's contributions in relation to
the statutorily required contribution 2,672,980 2,240,020 1,832,600 1,659,877
District's contribution deficiency (excess) -$ -$ -$ -$
District's covered-employee payroll 19,243,916$ 16,126,854$ 15,469,000$ 14,101,000$
District's contributions as a percentage of
covered-employee payroll 13.89% 13.89% 11.85% 11.77%
Reporting Fiscal Year
Reporting Fiscal Year
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
NOTE TO REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2018
55
NOTE 1 – PURPOSE OF SCHEDULES
Schedule of Changes in the Net OPEB Liability and Related Ratios
The Schedule of Changes in Net OPEB liability is presented to illustrate the elements of the District's Net OPEB
liability. There is a requirement to show information for 10 years. However, until a full 10-year trend is compiled,
governments should present information for those years for which information is available.
Schedule of Contributions – OPEB
This schedule presents information on the District's actuarially determined contribution, contributions in relation to
the actuarially determined contribution, and any excess or deficiency related to the actuarially determined
contribution. In the future, as data becomes available, ten years of information will be presented.
Schedule of Proportionate Share of the Net Pension Liability
The Schedule of the District’s Proportionate Share of the Net Pension Liability is presented to illustrate the elements
of the District’s Net Pension Liability. There is a requirement to show information for 10 years. However, until a full
10-year trend is compiled, governments should present information for those years for which information is
available.
Schedule of Contributions - Pensions
The Schedule of the District's Contributions is presented to illustrate the District’s required contributions relating to
the pensions. There is a requirement to show information for 10 years. However, until a full 10-year trend is compiled,
governments should present information for those years for which information is available.
Changes of Benefit Terms
There are no changes in benefit terms reported in the Required Supplementary Information.
Changes of Assumptions
The discount rate for CalPERS was 7.65% as of June 30, 2017 and 7.15% as of June 30, 2018. The discount rate for
CalSTRS was 7.60% as of June 30, 2017 and 7.10% as of June 30, 2018. The change in discount rate increased the
total net pension liability for each plan.
SUPPLEMENTARY INFORMATION
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
DISTRICT ORGANIZATIONAL STRUCTURE
JUNE 30, 2018
See accompanying note to supplementary information 56
Antelope Valley Community College District was established in 1929, and is comprised of one college located in
Lancaster. There were no changes in the boundaries of the District during the current year.
The Governing Board and District Administration for the fiscal year ended June 30, 2018 were composed of the
following members:
NAME OFFICE TERM EXPIRES
Lew Stults President 2022
Laura Herman Vice President 2020
Steve Buffalo Clerk 2020
Barbara Gains Trustee 2022
Michael Adams Trustee 2022
Vice President, Academic Affairs
GOVERNING BOARD
DISTRICT ADMINISTRATION
Edward Knudson
Superintendent/President
Vacant
Executive Director of Business Services, Chief Business Official
Mark Bryant
Vice President, Human Resources
Dr. Erin Vines
Vice President, Student Services
Diana Keelen
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
SCHEDULE OF EXPENDITURE OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2018
See accompanying note to supplementary information 57
Pass Through/
Grant Number
Federal
CFDA
Number
Federal
Expenditures
U.S. DEPARTMENT OF EDUCATION
Direct Programs
Financial Aid Cluster
Federal Supplemental Education Opportunity Grants (FESOG) * 84.007 400,525$
Federal Work Study Program (FWS) * 84.033 228,630
Federal Direct Student Loans * 84.268 8,720,105
Federal Pell Grant Program (PELL) * 84.063 24,615
Federal Pell Grant Program - Administrative Allowance * 84.063 25,294,558
Total Financial Aid Cluster 34,668,433
TRIO - Student Support Services * 84.042A 265,105
Higher Education Institutional Aid, Title V Program
Higher Education Institutional Aid, Title V * 84.031S 682,945
Higher Education Institutional Aid, Title V, Co-Op * 84.031C 215,480
Total Higher Educational Aid, Title V Program 898,425
Passed Through California Community College Chancellor's Office
Career and Technical Education Program
Career and Technical Education - Basic Grants * 84.048 537,513
Career and Technical Education - Transitions * 84.048A 41,593
Total Career and Technical Education Program 579,106
Total U.S. Department of Education 36,411,069
U.S. DEPARTMENT HEALTH AND HUMAN SERVICES
Passed Through California Community College Chancellor's Office
Temporary Assistance for Needy Families * 93.558 89,805
Total U.S. Department of Health and Human Services 89,805
U.S. DEPARTMENT OF AGRICULTURE
Passed Through California Community College Chancellor's Office
Forest Reserve - Schools and Roads - Grants to States * 10.665 20,331
Total U.S. Department of Agriculture 20,331
U.S. DEPARTMENT OF VETERANS AFFAIRS
Veterans Information and Assistance * 64.115 2,198
Total U.S. Department of Veterans Affairs 2,198
TOTAL EXPENDITURES OF FEDERAL AWARDS 36,433,598$
*Pass-Through number is either not available or not applicable
Federal Grantor/Pass-Through
Grantor/Program or Cluster Title
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
SCHEDULE OF STATE FINANCIAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2018
See accompanying note to supplementary information 58
Cash Received
Accounts
Receivable
Unearned
Revenue Total Revenue
Program
Expenditures
Antelope Valley Air Quality Mngmnt -$ 80,000$ -$ 80,000$ -$
Baccalaureate Degree Program - - - - 179,622
Basic Skills 629,216 - - 629,216 441,291
Cal Grants 2,549,907 - - 2,549,907 2,532,731
Calif Apprenticeship Initiative 200,000 9,075 - 209,075 209,075
California State Preschool 542,012 - - 542,012 542,012
CalWorks 1,026,315 9,122 - 1,035,437 1,142,219
Campus Safety & Sexual Assault 22,308 - - 22,308 -
CARE 280,908 - - 280,908 280,909
Career Tech AB1802 1X - - 1,331,728 1,331,728 1,245,056
Commercial Sexual Exploitation 5,279 1,506 - 6,785 6,785
DHH Deaf & Hard of Hearing 41,116 - - 41,116 41,116
Disabled Student Progr Svcs 779,372 - - 779,372 775,982
Dreamer Students One Time 17-18 328,045 - 58,543 269,502 269,502
Dss/Calworks 171,547 16,288 - 187,834 197,830
Employee Training Panel ETP 17,607 - - 17,607 17,607
Enrollment Fee Financial Asst. 201,751 - - 201,751 162,677
EOPS 931,102 - - 931,102 931,104
Foster Parent Training Program 84,163 18,350 - 102,513 102,513
FT Student Success Grant 1,078,781 - - 1,078,781 983,270
Hunger Free Campus 24,809 - - 24,809 10,017
Kern CCD Proposition 39 - (1,981) - (1,981) -
Mandated Cost Reimbursement 331,528 - - 331,528 188,032
Nursing Grant 61,537 82,218 - 143,755 143,755
Print & Electronic Info 10,864 - - 10,864 10,864
Quality Improvement STEP 4,000 6,270 - 10,270 10,270
RAMP UP VVC - - 257,514 257,514 257,514
SB CCD CTE Enhancement Fund - (2,930) - (2,930) -
SSSP Credit 2,657,649 (489,653) 2,888,357 3,009,217 3,137,751
SSSP NonCredit 28,231 - - 28,231 28,232
Staff Diversity 50,000 - - 50,000 33,522
State Lottery Proceeds-Prop 20 385,978 225,717 312,767 298,928 371,099
Strong Workforce Program 40% - 348,015 92,593 440,608 255,606
Strong Workforce Program 60% - - 914,923 303,984 303,984
Student Equity 1,688,472 - 2,369,408 2,401,121 2,478,134
Student Financial Aid Admin 594,602 - - 594,602 594,602
SWP Job Developer 112,500 - 93,268 19,232 -
TANF - State (50%) 66,316 20,942 - 87,257 87,257
Veterans Resource Cntr Ongoing 52,364 - - 52,364 -
Total State District Funding 14,958,279$ 322,939$ 8,319,101$ 18,356,327$ 17,971,940$
Program Revenues
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
SCHEDULE OF WORKLOAD MEASURES FOR STATE GENERAL APPORTIONMENT –
ANNUAL/ACTUAL ATTENDANCE
FOR THE YEAR ENDED JUNE 30, 2018
See accompanying note to supplementary information 59
CATEGORIES
A. Summer Intersession (Summer 2017 only)
1. Noncredit 4.23 - 4.23
2. Credit 540.71 - 540.71
B. Summer Intersession (Summer 2018 - Prior to July 1, 2018)
1. Noncredit - - -
2. Credit - - -
C. Primary Terms (Exclusive of Summer Intersession)
1. Census Procedure Courses
(a) Weekly Census Contact Hours 7,551.39 - 7,551.39
(b) Daily Census Contact Hours 1,014.12 - 1,014.12
2. Actual Hours of Attendance Procedure Courses
(a) Noncredit 80.00 - 80.00
(b) Credit 507.22 - 507.22
3. Alternative Attendance Accounting Procedure Courses
(a) Weekly Census Contact Hours 641.52 - 641.52
(b) Daily Census Contact Hours 173.76 - 173.76
(c) Noncredit Independent Study/Distance
Education Courses - - -
D. Total FTES 10,512.95 - 10,512.95
Supplemental Information (subset of above information)
E. In-service Training Courses - - -
F. Basic Skills Courses and Immigrant Education
1. Credit 1,234.71 - 1,234.71
2. Noncredit 80.88 - 80.88
Total Basic Skills FTES 1,315.59 - 1,315.59
Reported
Data
Audit
Adjustments
Audited
Data
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
RECONCILIATION OF ANNUAL FINANCIAL AND BUDGET REPORT (CCFS-311) WITH
AUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2018
See accompanying note to supplementary information 60
There were no adjustments proposed to any funds of the District.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
RECONCILIATION OF ECS 84362 (50 PERCENT LAW) CALCULATION
FOR THE YEAR ENDED JUNE 30, 2018
See accompanying note to supplementary information 61
Object/
TOP Audit Audit
Codes Reported Data Adjustments Revised Data Reported Data Adjustments Revised Data
Instructional Salaries
Contract or Regular 1100 13,989,154 - 13,989,154 13,989,154 - 13,989,154
Other 1300 12,437,263 - 12,437,263 12,437,263 - 12,437,263
Total Instructional Salaries 26,426,417 - 26,426,417 26,426,417 - 26,426,417
Non-Instructional Salaries
Contract or Regular 1200 - - - 3,915,044 - 3,915,044
Other 1400 - - - 837,987 - 837,987
Total Non-Instructional Salaries - - - 4,753,031 - 4,753,031
Total Academic Salaries 26,426,417 - 26,426,417 31,179,448 - 31,179,448
Non-Instructional Salaries
Regular Status 2100 - - - 12,351,906 - 12,351,906
Other 2300 - - - 1,589,919 - 1,589,919
Total Non-Instructional Salaries - - - 13,941,825 - 13,941,825
Instructional Aides
Regular Status 2200 873,441 - 873,441 873,441 - 873,441
Other 2400 181,806 - 181,806 181,806 - 181,806
Total Instructional Aides 1,055,247 - 1,055,247 1,055,247 - 1,055,247
Total Classsified Salaries 1,055,247 - 1,055,247 14,997,072 - 14,997,072
Employee Benefits 3000 6,248,028 - 6,248,028 14,129,915 - 14,129,915
Supplies and Materials 4000 - - - 1,263,637 - 1,263,637
Other Operating Expenses 5000 - - - 8,395,012 - 8,395,012
Equipment Replacement 6420 - - - 1,184,202 - 1,184,202
Total Expenditures Prior to Exclusions 33,729,692 - 33,729,692 71,149,286 - 71,149,286
Activities to Exclude
Inst. Staff-Retirees' Benefits and Incentives 5900 - - - 493,358 - 493,358
Std. Health Srvcs. Above Amount Collected 6441 - - - - - -
Student Transportation 6491 - - - - - -
Non-inst.Staff-Retirees' Benefits and Incentives 6740 - - - - - -
Object to Exclude
Rents and Leases 5060 - - - 415,193 - 415,193
Lottery Expenditures - - - - - -
Academic Salaries 1000 - - - - - -
Classified Salaries 2000 - - - - - -
Employee Benefits 3000 - - - - - -
Supplies and Materials 4000
Software 4100 - - - - - -
Books, Magazines & Periodicals 4200 - - - - - -
Instructional Supplies & Materials 4300 - - - - - -
Non-inst. Supplies & Materials 4400 - - - - - -
Total Supplies and Materials - - - - - -
Other Operating Expenses and Services 5000 - - - 2,661,929 - 2,661,929
Capital Outlay 6000 - - - - - -
Library Books 6300 - - - 166,297 - 166,297
Equipment 6400 - - - - - -
Equipment - Additional 6410 - - - - - -
Equipment - Replacement 6420 - - - 99,356 - 99,356
Total Equipment - - - 99,356 - 99,356
Total Capital Outlay - - - 265,653 - 265,653
Other Outgo 7000 - - - - - -
Total Exclusions -$ -$ -$ 3,836,133$ -$ 3,836,133$
Total for ECS 84362, 50% Law 33,729,692$ -$ 33,729,692$ 67,313,153$ -$ 67,313,153$
Percent of CEE (Instructional Salary Cost/Total CEE) 50.11% 0.00% 50.11% 100.00% 0.00% 100.00%
50% of Current Expense of Education 33,656,577$ -$ 33,656,577$
Academic Salaries
Classified Salaries
Exclusions
Activity (ESCA) ECS 84362 A
Instructional Salary Cost AC 0100-5900 & Activity (ECSB) ECS 84362 B Total CEE
AC 6100 AC 0100-6799
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
DETAILS OF THE EDUCATION PROTECTION ACCOUNT
FOR THE YEAR ENDED JUNE 30, 2018
See accompanying note to supplementary information 62
EPA Revenue 8,801,611
Activity Salaries and Operating Capital
Code Benefits Expenses Outlay
(Obj 1000-3000) (Obj 4000-5000) (Obj 6000) Total
Instructional Activities 0100-5900 8,801,611 - - 8,801,611
Total 8,801,611 - - 8,801,611
Activity Classification
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
RECONCILIATION OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION
JUNE 30, 2018
See accompanying note to supplementary information 63
Total Fund Equity - District Funds Included
in the Reporting Entity 152,332,862$
Nondepreciable capital assets 49,887,785$
Depreciable capital assets 287,250,664
Accumulated depreciation (46,020,811) 291,117,638
Accrued interest (4,544,658)
Net pension liability (72,726,520)
Compensated absences (1,848,406)
OPEB liability (6,139,627)
Bank faculty load time (131,815)
Capital lease
Other long-term debt (314,956,378)
Deferred outflows of resources 33,956,264
Deferred inflows of resources (6,590,501)
Adjustments related to bookstore & cafeteria funds 28,388
Net Position Reported Within the
Statements of Net Position 70,497,247$
Assets recorded within the statements of net position not
included in the District fund financial statements:
Liabilities recorded within the statements of net position
not recorded in the District fund financial statements:
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
NOTE TO SUPPLEMENTARY INFORMATION
JUNE 30, 2018
64
NOTE 1 - PURPOSE OF SCHEDULES
DISTRICT ORGANIZATIONAL STRUCTURE
Schedule of Expenditure of Federal Awards
The Schedule of Expenditure of Federal Awards includes the federal award activity of Antelope Valley Community
College District, and is presented on the accrual basis of accounting. The information in this schedule is presented
in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Expenditures are
recognized following, as applicable, either the cost principles in OMB Circular A-21, Cost Principles for Educational
Institutions or the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not
allowable or are limited as to reimbursement. The District has elected not to use the 10-percent de minimis indirect
cost rate allowed under the Uniform Guidance.
Schedule of State Financial Awards
The accompanying Schedule of State Financial Awards includes State grant activity of the District and is presented
on the accrual basis of accounting. Therefore, some amounts presented in this schedule may differ from amounts
presented in, or used in the preparation of, the basic financial statements. The information in this schedule is
presented to comply with reporting requirements of the California Community College Chancellor's System's Office.
Schedule of Workload Measures for State General Apportionment – Annual/Actual Attendance
Full-time equivalent students is a measurement of the number of students attending classes of the District. The
purpose of attendance accounting from a fiscal standpoint is to provide the basis on which apportionments of State
funds are made to community college districts. This schedule provides information regarding the attendance of
students based on various methods of accumulating attendance data.
Reconciliation of Annual Financial and Budget Report (CCFS-311) with Audited Financial Statements
This schedule provides the information necessary to reconcile the fund balance of all funds reported on the CCFS-
311 to the audited basic financial statements.
Reconciliation of ECS 84362 (50 Percent Law) Calculation
This schedule provides the information necessary to reconcile the 50 Percent Law Calculation reported on the CCFS-
311 to the audited data.
Proposition 30 Education Protection Account (EPA) Expenditure Report -Details of the Education Protection Account
This schedule provides information about the District's EPA proceeds and summarizes how the EPA proceeds were
spent.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
NOTE TO SUPPLEMENTARY INFORMATION
JUNE 30, 2018
65
NOTE 1 - PURPOSE OF SCHEDULES, continued
Reconciliation of Governmental Funds to the Statement of Net Position
This schedule provides the information necessary to reconcile the fund balances to the audited financial statements.
OTHER INDEPENDENT
AUDITORS’ REPORTS
66
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
The Board of Trustees
Antelope Valley Community College District
Lancaster, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller
General of the United States, the financial statements of the Antelope Valley Community College District, as of and
for the year ended June 30, 2018, and the related notes to the financial statements, which collectively comprise the
Antelope Valley Community College District’s basic financial statements, and have issued our report thereon dated
December 19, 2018.
Emphasis of Matter – Change in Accounting Principles
As discussed in Note 1 to the financial statements, in 2018, the Districted adopted new accounting guidance, GASB
Statement No. 75, Financial Reporting for Postemployment Benefit Plans Other than Pension Plans. Our opinion is
not modified with respect to this matter.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered Antelope Valley Community College
District internal control over financial reporting (internal control) to determine the audit procedures that are
appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not
for the purpose of expressing an opinion on the effectiveness of the Antelope Valley Community College District
internal control. Accordingly, we do not express an opinion on the effectiveness of the Antelope Valley Community
College District’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent, or detect and correct,
misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal
control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements
will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a
combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough
to merit attention by those charged with governance.
67
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and
was not designed to identify all deficiencies in internal control that might be material weaknesses or significant
deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we
consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Antelope Valley Community College District’s financial
statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on
the determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our
tests disclosed no instances of noncompliance or other matters that are required to be reported under Government
Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the
results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on
compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards
in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any
other purpose.
San Diego, California
December 19, 2018
68
INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM; AND
REPORT ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE
The Board of Trustees
Antelope Valley Community College District
Lancaster, California
Report on Compliance for Each Major Federal Program
We have audited Antelope Valley Community College District’s compliance with the types of compliance
requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of
Antelope Valley Community College District’s major federal programs for the year ended June 30, 2018. Antelope
Valley Community College District’s major federal programs are identified in the summary of auditor’s results section
of the accompanying schedule of findings and questioned costs.
Management’s Responsibility
Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its
federal awards applicable to its federal programs.
Auditor’s Responsibility
Our responsibility is to express an opinion on compliance for each of Antelope Valley Community College District’s
major federal programs based on our audit of the types of compliance requirements referred to above. We
conducted our audit of compliance in accordance with auditing standards generally accepted in the United States
of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part
200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform
Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain
reasonable assurance about whether noncompliance with the types of compliance requirements referred to above
that could have a direct and material effect on a major federal program occurred. An audit includes examining, on
a test basis, evidence about Antelope Valley Community College District compliance with those requirements and
performing such other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program.
However, our audit does not provide a legal determination of Antelope Valley Community College District
compliance.
69
Opinion on Each Major Federal Program
In our opinion, Antelope Valley Community College District complied, in all material respects, with the types of
compliance requirements referred to above that could have a direct and material effect on each of its major federal
programs for the year ended June 30, 2018.
Report on Internal Control Over Compliance
Management of Antelope Valley Community College District is responsible for establishing and maintaining
effective internal control over compliance with the types of compliance requirements referred to above. In planning
and performing our audit of compliance, we considered Antelope Valley Community College District’s internal
control over compliance with the types of requirements that could have a direct and material effect on each major
federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of
expressing an opinion on compliance for each major federal program and to test and report on internal control over
compliance in accordance with Uniform Guidance, but not for the purpose of expressing an opinion on the
effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of
Antelope Valley Community College District’s internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over compliance
does not allow management or employees, in the normal course of performing their assigned functions, to prevent,
or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis.
A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal
control over compliance, such that there is a reasonable possibility that material noncompliance with a type of
compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A
significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal
control over compliance with a type of compliance requirement of a federal program that is less severe than a
material weakness in internal control over compliance, yet important enough to merit attention by those charged
with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first paragraph
of this section and was not designed to identify all deficiencies in internal control over compliance that might be
material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over
compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not
been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of
internal control over compliance and the results of that testing based on the requirements of Uniform Guidance.
Accordingly, this report is not suitable for any other purpose.
San Diego, California
December 19, 2018
70
INDEPENDENT AUDITORS’ REPORT ON STATE COMPLIANCE
The Board of Trustees
Antelope Valley Community College District
Lancaster, California
Report on State Compliance
We have audited Antelope Valley Community College District’s compliance with the types of compliance
requirements described in the California Community Colleges Contracted District Audit Manual (CDAM) 2017‐18,
issued by the California Community Colleges Chancellor’s Office for the year ended June 30, 2018.
Management’s Responsibility
Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants
applicable to its state programs.
Auditor’s Responsibility
Our responsibility is to express an opinion on Antelope Valley Community College District’s compliance with the
requirements referred to above. We conducted our audit of compliance in accordance with auditing standards
generally accepted in the United States of America; the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States; and the California
Community Colleges Contracted District Audit Manual (CDAM) 2017‐18, issued by the California Community Colleges
Chancellor’s Office. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether noncompliance with the types of compliance requirements referred to above that could have a direct
and material effect on the state programs noted below. An audit includes examining, on a test basis, evidence about
Antelope Valley Community College District’s compliance with those requirements and performing such other
procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance with the requirements referred
to above. However, our audit does not provide a legal determination of Antelope Valley Community College
District’s compliance with those requirements.
Opinion
In our opinion, the District complied, in all material respects, with the compliance requirements referred to above
that are applicable to the programs noted below that were audited for the year ended June 30, 2018.
71
Other Matters
In connection with the audit referred to above, we selected and tested transactions and records to determine
Antelope Valley Community College District’s compliance with the state laws and regulations applicable to the
following items:
Section 421 – Salaries of Classroom Instructors (50 Percent Law)
Section 423 – Apportionment for Instructional Service Agreements/Contracts
Section 424 – State General Apportionment Funding System
Section 425 – Residency Determination for Credit Courses
Section 426 – Students Actively Enrolled
Section 427 – Dual Enrollment of K-12 Students in Community College Credit Courses
Section 428 – Student Equity
Section 429 – Student Success and Support Program (SSSP)
Section 430 – Scheduled Maintenance Program
Section 431 – Gann Limit Calculation
Section 435 – Open Enrollment
Section 439 – Proposition 39 Clean Energy
Section 440 – Intersession Extension Program
Section 444 – Apprenticeship Related and Supplemental Instruction (RSI) Funds
Section 475 – Disabled Student Programs and Services (DSPS)
Section 479 – To Be Arranged Hours (TBA)
Section 490 – Proposition 1D State Bond Funded Projects
Section 491 – Proposition 55 Education Protection Account Funds
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing over state laws and regulations based on
the requirements described in the California Community Colleges Contracted District Audit Manual (CDAM) 2017‐
18. Accordingly, this report is not suitable for any other purpose.
San Diego, California
December 19, 2018
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
SCHEDULE OF AUDIT FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2018
72
Section I – Summary of Auditor’s Results
FINANCIAL STATEMENTS
Type of auditors' report issued: Unmodified
Internal control over financial reporting:
Material weaknesses identified? No
Significant deficiencies identified not considered
to be material weaknesses? None Noted
Non-compliance material to financial statements noted? No
FEDERAL AWARDS
Internal control over major programs:
Material weaknesses identified? No
Significant deficiencies identified not considered
to be material weaknesses? None reported
Type of auditors' report issued on compliance for major programs: Unmodified
Any audit findings disclosed that are required to be reported in accordance
with Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative
Requirements, Costs Principles, and Audit Requirements for Federal Awards No
Identification of major programs:
CFDA Numbers Name of Federal Program of Cluster
84.007, 84.033, 84.063, 84.268 Student Financial Aid Cluster
84.031S, 84.031C
Higher Education Institutional Aid,
Title V Program
Dollar threshold used to distinguish between Type A and Type B programs: 750,000$
Auditee qualified as low-risk auditee? Yes
STATE AWARDS
Internal control over State programs:
Material weaknesses identified? No
Significant deficiencies identified not considered
to be material weaknesses? None Noted
Type of auditors' report issued on compliance for State programs: Unmodified
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
SCHEDULE OF AUDIT FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2018
73
Section II – Financial Statement Findings
This section identifies the significant deficiencies, material weaknesses, and instances of noncompliance related to
the financial statements that are required to be reported in accordance with Government Auditing Standards.
There were no financial statement findings or questioned costs identified during 2017‐18.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
SCHEDULE OF AUDIT FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2018
74
Section III – Federal Award Findings and Questioned Costs
This section identifies the audit findings required to be reported by the OMB Compliance Supplement (e.g.,
deficiencies, significant deficiencies, material weaknesses, and instances of noncompliance, including questioned
costs).
There were no federal award findings or questioned costs identified during 2017‐18.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
SCHEDULE OF AUDIT FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2018
75
Section IV – State Award Findings and Questioned Costs
This section identifies the audit findings pertaining to noncompliance with state program rules and regulations.
There were no state award findings or questioned costs identified during 2017‐18.
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
SCHEDULE OF PRIOR YEAR AUDIT FINDINGS
FOR THE YEAR ENDED JUNE 30, 2018
76
FINDING #2017-1 – COLLEGE CASHIER’S OFFICE SEGREGATION OF DUTIES
Criteria – District internal control procedures over cash receipts require that only personnel involved with the cash
collection process should have access to the cashier’s office. All equipment located within the cashier’s office
should have access codes and updated annually to ensure proper personnel have access.
Condition – In our testing over cash receipts, we noted all current and past employees who worked in the cashier’s
office had the combination code to the safe. In addition, it was noted that the alarm system only sounds in the
room and provides no breach to other departments. Finally, it was noted that there are no security cameras located
in the cashier’s office to provide an added level of controls over cash.
Fiscal Impact – No direct fiscal impact.
Effect – Non-compliance with District procedures could create an increased risk of fraud/asset misappropriation.
Cause – The District has not updated the access to the cashier’s office and has continued to use the same access
codes for both the room and safe.
Recommendation - We recommend the District ensure that only personnel who directly work with the cashier’s
office have access to both the cashier’s room and safe. The District should ensure that all security measures in place
provide notification to other departments should a breach take place. Finally, we recommend the District install
security cameras to help deter any potential security threats in the future.
District Response – The room that houses the safes requires prox card access. When an employee is no longer
working in the office, facilities is contacted to remove access to the cashier’s office. We have modified the process
so that those who have access have their own unique code to access the safe. Once the employee leaves, the fiscal
services manager ensures that the unique code on the safe is no longer valid.
Current Status – Implemented
ANTELOPE VALLEY COMMUNITY COLLEGE DISTRICT
SCHEDULE OF PRIOR YEAR AUDIT FINDINGS
FOR THE YEAR ENDED JUNE 30, 2018
77
FINDING #2017‐2 – ANNUAL CCFS‐311 REPORTING
Criteria – The California Community Colleges Chancellor’s Office requires that each community college district
report the financial activity of the General Fund on a quarterly basis via the CCFS‐311Q report and the districtsʹ total
revenues and expenditures for the fiscal year via the CCFS‐311 by October 10 of each year. This report is also
required to include the adopted budget for the subsequent fiscal year.
Condition – In our testing of the District annual CCFS‐311 for the fiscal year 2016‐17 we noted that the certification
and filing did not occur by October 10, 2017.
Questioned Costs – No questioned costs noted.
Effect – Noncompliance with submission requirements for the annual CCFS‐311.
Cause – The annual revised CCFS‐311 report was certified to the State Chancellor’s Office on November 20, 2017.
Recommendation – We recommend that in accordance with the instructions of the State Chancellor’s Office for
the Annual Financial and Budget Report requirements, the annual activity of all funds of the District be made
available to the public on or before September 30 of each year and be submitted to the Chancellor’s Office no later
than October 10 of each year.
District Response – Due to this being the first reporting year under fiscal independence, the information required
validation for accuracy prior to submittal. It was discovered that there were several miscoded positions and so
manual work was required to report the information accurately. A week prior to the CCFS311 deadline, the District
requested an extension, which was granted. The District has been meeting to resolve the miscoding of
positions. Future annual CCFS311 reports are expected to be submitted timely.
Current Status – Implemented